SUMMER TRAINING PROJECT REPORT ON

ldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR IN GENERATING SALESrdquo

For

AEGON RELIGARE LIFE INSURANCE CO LTD

BHUBANESWAR

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT (INTERNATIONAL

BUSINESS)

UNDER THE GUIDANCE OF

MR S N Biswas

UNDER THE SUPERVISION OF

Sheikh Rihan Ullah

1

SUBMITTED BY

Prashant Jain

PGDBM(IB) 2008-10

INDIAN INSTITUE OF TRAVEL AND TOURISM MANAGEMENT

MİNİSTRY OF TOURISM GOVT OF INDİA

Bhubaneswar (ORISSA)

CONTENTS

2

CERTIFICATE ------------------------------------------------------

ACKNOWLEDGEMENT------------------------------------------------

DECLARATION-----------------------------------------------------

PREFACE-------------------------------------------------------------

EXECUTIVE SUMMARY-----------------------------------------

INDEX-----------------------------------------------------------------

CERTIFICATE BY THE ORGANIZATION

3

This the certify that Mr PRASHANT JAIN pursuing PGDM(international

business) at Indian Institute of Travel amp Tourism Management

Bhubaneswar has worked under my supervision and guidance on his

dissertation entitled ldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR IN

GENERATING SALESrdquo at aegon religare life insurance bhubanewar

from may 15-may-09 to14-jul-09

To the best of my knowledge this is an original piece of work

ACKNOWLEDGEMENT

4

Sometimes words fall short to show gratitude the same happened with me during this project The immense help and

support received from Aegon religare life insurance overwhelmed me during the project

My sincere gratitude to Mr Lalit Patnaik (Branch Head bhubaneswar region ) and Dr Adyasha Das (Chairperson

international business IITTM Bhubaneswar) for providing me with an opportunity to work with Aegon religare Life Insurence

I am highly indebted to Mr Shaikh Rihan Ullah Business Manager ( BM) Aegon religare and company project guide who has provided me with the necessary information and his

valuable suggestion and comments on bringing out this report in the best possible way

I also thank Mr S N Biswas faculty guide IITTM Bhubaneswar who has sincerely supported me with the valuable

insights into the completion of this project

Last but not the least I am grateful to my heartfelt love for my parents my elder brother Er ASHWANI JAIN and my friends whose constant support and blessings helped me

throughout this project

5

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

SUBMITTED BY

Prashant Jain

PGDBM(IB) 2008-10

INDIAN INSTITUE OF TRAVEL AND TOURISM MANAGEMENT

MİNİSTRY OF TOURISM GOVT OF INDİA

Bhubaneswar (ORISSA)

CONTENTS

2

CERTIFICATE ------------------------------------------------------

ACKNOWLEDGEMENT------------------------------------------------

DECLARATION-----------------------------------------------------

PREFACE-------------------------------------------------------------

EXECUTIVE SUMMARY-----------------------------------------

INDEX-----------------------------------------------------------------

CERTIFICATE BY THE ORGANIZATION

3

This the certify that Mr PRASHANT JAIN pursuing PGDM(international

business) at Indian Institute of Travel amp Tourism Management

Bhubaneswar has worked under my supervision and guidance on his

dissertation entitled ldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR IN

GENERATING SALESrdquo at aegon religare life insurance bhubanewar

from may 15-may-09 to14-jul-09

To the best of my knowledge this is an original piece of work

ACKNOWLEDGEMENT

4

Sometimes words fall short to show gratitude the same happened with me during this project The immense help and

support received from Aegon religare life insurance overwhelmed me during the project

My sincere gratitude to Mr Lalit Patnaik (Branch Head bhubaneswar region ) and Dr Adyasha Das (Chairperson

international business IITTM Bhubaneswar) for providing me with an opportunity to work with Aegon religare Life Insurence

I am highly indebted to Mr Shaikh Rihan Ullah Business Manager ( BM) Aegon religare and company project guide who has provided me with the necessary information and his

valuable suggestion and comments on bringing out this report in the best possible way

I also thank Mr S N Biswas faculty guide IITTM Bhubaneswar who has sincerely supported me with the valuable

insights into the completion of this project

Last but not the least I am grateful to my heartfelt love for my parents my elder brother Er ASHWANI JAIN and my friends whose constant support and blessings helped me

throughout this project

5

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

CERTIFICATE ------------------------------------------------------

ACKNOWLEDGEMENT------------------------------------------------

DECLARATION-----------------------------------------------------

PREFACE-------------------------------------------------------------

EXECUTIVE SUMMARY-----------------------------------------

INDEX-----------------------------------------------------------------

CERTIFICATE BY THE ORGANIZATION

3

This the certify that Mr PRASHANT JAIN pursuing PGDM(international

business) at Indian Institute of Travel amp Tourism Management

Bhubaneswar has worked under my supervision and guidance on his

dissertation entitled ldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR IN

GENERATING SALESrdquo at aegon religare life insurance bhubanewar

from may 15-may-09 to14-jul-09

To the best of my knowledge this is an original piece of work

ACKNOWLEDGEMENT

4

Sometimes words fall short to show gratitude the same happened with me during this project The immense help and

support received from Aegon religare life insurance overwhelmed me during the project

My sincere gratitude to Mr Lalit Patnaik (Branch Head bhubaneswar region ) and Dr Adyasha Das (Chairperson

international business IITTM Bhubaneswar) for providing me with an opportunity to work with Aegon religare Life Insurence

I am highly indebted to Mr Shaikh Rihan Ullah Business Manager ( BM) Aegon religare and company project guide who has provided me with the necessary information and his

valuable suggestion and comments on bringing out this report in the best possible way

I also thank Mr S N Biswas faculty guide IITTM Bhubaneswar who has sincerely supported me with the valuable

insights into the completion of this project

Last but not the least I am grateful to my heartfelt love for my parents my elder brother Er ASHWANI JAIN and my friends whose constant support and blessings helped me

throughout this project

5

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

This the certify that Mr PRASHANT JAIN pursuing PGDM(international

business) at Indian Institute of Travel amp Tourism Management

Bhubaneswar has worked under my supervision and guidance on his

dissertation entitled ldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR IN

GENERATING SALESrdquo at aegon religare life insurance bhubanewar

from may 15-may-09 to14-jul-09

To the best of my knowledge this is an original piece of work

ACKNOWLEDGEMENT

4

Sometimes words fall short to show gratitude the same happened with me during this project The immense help and

support received from Aegon religare life insurance overwhelmed me during the project

My sincere gratitude to Mr Lalit Patnaik (Branch Head bhubaneswar region ) and Dr Adyasha Das (Chairperson

international business IITTM Bhubaneswar) for providing me with an opportunity to work with Aegon religare Life Insurence

I am highly indebted to Mr Shaikh Rihan Ullah Business Manager ( BM) Aegon religare and company project guide who has provided me with the necessary information and his

valuable suggestion and comments on bringing out this report in the best possible way

I also thank Mr S N Biswas faculty guide IITTM Bhubaneswar who has sincerely supported me with the valuable

insights into the completion of this project

Last but not the least I am grateful to my heartfelt love for my parents my elder brother Er ASHWANI JAIN and my friends whose constant support and blessings helped me

throughout this project

5

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Sometimes words fall short to show gratitude the same happened with me during this project The immense help and

support received from Aegon religare life insurance overwhelmed me during the project

My sincere gratitude to Mr Lalit Patnaik (Branch Head bhubaneswar region ) and Dr Adyasha Das (Chairperson

international business IITTM Bhubaneswar) for providing me with an opportunity to work with Aegon religare Life Insurence

I am highly indebted to Mr Shaikh Rihan Ullah Business Manager ( BM) Aegon religare and company project guide who has provided me with the necessary information and his

valuable suggestion and comments on bringing out this report in the best possible way

I also thank Mr S N Biswas faculty guide IITTM Bhubaneswar who has sincerely supported me with the valuable

insights into the completion of this project

Last but not the least I am grateful to my heartfelt love for my parents my elder brother Er ASHWANI JAIN and my friends whose constant support and blessings helped me

throughout this project

5

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

DECLARATION

I Mr prashant jain do hereby declare that the project report

titled ldquoldquoEFFECTIVENESS OF RECRUITING LIFE ADVISOR

INGENERATING SALESrdquo is a genuine research work

undertaken by me and it has not been published anywhere earlier

Date

Place- BHUBANESWAR

PRASHANT JAIN

IITTM Bhubaneswar

6

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

PREFACE

Insurance is a booming sector Most of the insurance industry

works on the concept of recruiting of financial advisors and

selling policies through them In this process the most important

aspect is the efficiency of the insurance advisors For making

work through insurance advisors effective it is very important to

make them undergo an effective training This project deals

with the importance of training process Every company incurs

huge expenses for training of the advisors Now it becomes very

important to know whether this money is being fruitful or not

My project deals with the training and recruitment process of

AEGON RELIGARE life insurance Every company has its own

set of recruitment policies and based on that advisors are

selected In my project I have tried to find out how important is

training for an insurance company and how effective it is for the

people who are recruited

7

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Executive Summary

Monopoly of LIC has been broken to make Indian Insurance to change its face and pace to tap the market and to make the new challenges in it Insurance in India is not about India only it is an open sector for the private players The name which you would see in Indian insurance market is something like - BAJAJ (Indian company) + Allianz (foreign player) TATA (Indian company) + Aig (foreign player) and so many like them Companies now are tapping a lot of ways to capture the market and hence adopting different ways to hold the large portion of the market My project was to understand the different marketing strategies adopted by the companies to increase their market share and along with it meeting their own targets to achieve the position of no1 in respective field or segment of the market My summer training learning helped me a lot to complete my project in order to learn a lot of things of the corporate As a project trainee the first task given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to the our target competition For this we did developed a questionnaire and I did my survey in important location of Bhubaneswar

8

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

INDEX

1INTRODUCTION

11 Topic

12 Reason For Selection Of This Topic

13 Objective

14 Limitation

2 INSURANCE INDUSTRY21 Meaning of Insurance22 Importance of Insurance23 Difference between Insurance and Assurance24 Principles of Insurance25 History of Insurance26 Time line in Insurance history27 Meaning of Life Insurance28 History of Life Insurance29 Key features of Life Insurance210 Benefits of Life Insurance211 Role of Life Insurance in the growth of economy

3 INTRODUCTION TO THE COMPANY31 About AegonReligare Life Insurance32 Role of IT at AegonReligare Life Insurance33 Core Values34 Subsidiary Companies

35 Religare Joint Ventures9

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

36 Head ndash Office

37 Branches

4 PRODUCT MIX41 Traditional Plans

5 HUMAN RESOURCE MANAGEMENT51 Recruitment52 Selection53 Training and Development54 Career Development55 Communication56 Incentives57 Services58 Performance Appraisal59 Organizational form and Structure510 Department

6 MARKETING DEPARTMENT61 Comparative Study

7 RESEARCH METHODOLOGY71 Objective of the study72 Questionnaire73 Sampling Method and Sampling Size74 Limitations

10

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

75 Analysis of Questionnaire76 SWOT Analysis

8 CONLUSION

9 APPENDIX

10 BIBLIOGRAPHY AND REFRENCES

11

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

1 INTRODUCTION

11 TOPIC

At AEGONRELIGARE Life Insurance I was assigned with the

topic as ldquoEFFECTIVENESS OF RECRUITING LIFE

ADVISOR IN GENERATING SALES FOR AEGON

RELIGARErdquo for my project work The selection of the topic

was in order to take know how do these companies generates

business through them

Life Advisor is those sources of a company who have their

own relations and personal contacts among common public that

they use to generate business through Company has certain

criteria to recruit these Financial Consultants The steps are as

follows

12 REASON FOR SELECTION OF THIS TOPIC

The financial sector is one of the booming and increasing leaps

and bounce some of the experts say only 30 of Indian

population is insured which means 70 Indian are not insured

and therefore having a bright prospect of progress of this sector

12

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

where I too would like to build my career and be a part of

success story

The Life Advisor are another channel through which the

company sales its policy It is really difficult to convince and

sale a single policy but since these advisor have their contacts

which they can sale a single policy Whereas I found my interest

in dealing interacting and handling a team because all this most

of time park you in some critical zone which becomes challenge

for you and your responsibility becomes to solve the critical

situation or problems

13

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

13OBJECTIVE

The main of the present study is accomplish the following objective

The objective behind the project is as follows Training aims at recruiting maximum number of life

advisors and to sell the maximum policies for the company and bring the business for the company which ever going at the particular point of time

To find the right candidate To about their family backgroundoccupationsocial

relationqualificationage Finalize candidates for the IRDA training Proper understanding and analysis of life insurance

industry To know about brand awareness of Aegon Religare life

insurance and customerrsquos preference about Aego Religare insurance

Conduct market survey on a sample selected from the entire population and derived opinion on that research

According the market survey come know about how much potential of insurance market in our city

And base on the analysis of the result thus obtained make a report on that research

Along with it I will gaining thorough knowledge of insurance sector

14Limitation

14

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Some of the difficulties and limitations faced by me during my training are as follows

Lack of awareness among the people- This is the biggest limitation found in this sector Most of the people are not aware about importance and the necessity of the insurance in their life They are not aware how useful life insurance can be for their family members if something happens to them

Perception of the people towards insurance sector- people still consider insurance just as a Tax saving device So today also there is rush to buy an insurance policy only at the end of the financial year like JanuaryFebruary and march making the other nine months dry for this business

Insurance does not give good returns- still today people think that insurance does not give good returns They are not aware of the modern unit linked insurance plans which are offered by most of the private sectors players They are still under the perception that if they take insurance they will get only 5-6 return which is not true nowadays

15

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Lack of awareness about the earning opportunity in the insurance sector- people still today are not aware about the earning opportunity that the insurance sectors gives After the privatization of the insurance sector many private giants have entered the insurance sector These private companies in order to beat the competition and to increase their insurance advisor to increase their reach to the customers are giving very high commission rates but people are not aware of that

Increased competition- Today the competition in the insurance sector has become very stiff Currently there are 22 Life Insurance Companies working in india including the LIC Today each and every company is trying to increase their insurance advisors so that they can increase their insurance advisor so that they can increase their reach in the market This situation has created a scenario in which to recruit Life Insurance Advisor and to sell life insurance policy has become very difficult

CHAPTER-216

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

INSURANCE INDUSTRY

21 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 liabilityInsurance can be defined as a ldquolegal 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 uncertainrdquo The other party called insured pays in exchange a fixed sum known as premiumInsurance is desired to safeguard oneself and onersquos family against possible losses on account of risks and perils It provides financial compensation for the losses suffered due to the happening of any unforeseen events

22 IMPORTANCE OF INSURANCE

Insurance constitutes one of the major segments of the financial marketInsurance services play predominant role in the process of financial intermediary Today insurance industry is one of the

17

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

most growing sectors in India There is lot of potential in the Indian Insurance IndustryThere 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 sectorThe major issue right now is the hike in FDI (Foreign Direct Investment)limit from 26 to 49 in the insurance sector Government may in nearfuture allow 49 FDI in Insurance This would lead to more capital inflow by foreign partnersAnother 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 improvedin terms of efficiencyThere are number of other hot topics like penetration of Health InsuranceRural marketing of insurance new distribution channels new product ranges insurance brokersrsquo regulation incentive scheme of development officers of LIC etc So it offers lot of scope for studying the insuranceindustryRight 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 tobe tappedBefore 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 word lsquoinsurancersquo is different from the wordlsquoassurancersquo

23 DIFFERENCE BEETWEN INSURANCE AND ASSURANCE

18

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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 etcThe word assurance indicated certainty In life insurance there is an assurance from the insurance company tomake 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 thepropertyThe insured event was bound to happen sooner or later under assurance but the event insured against may or may not happen under insuranceThe principle of ldquoindemnityrdquo applies to ldquoinsurance contractsrdquo(non-life) onlyThe scope of the word insurance is wider

24 PRINCIPLES OF INSURANCEAn insurance contract is based on some basic principles of insurance(1) Principle of ldquoUberrima Fidesrdquo or Principle of utmost good faithIt means ldquomaximum truthrdquo Both the parties should disclose allmaterial information regarding the subject matter of insurance(2) Principle of indemnityThis 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

19

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

This means the insurer has the right to stand in the place of the insuredafter settlement of claims in so far as the insuredrsquos right of recovery from an alternative source is involved The insurer before the settlement of theclaim 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 and prevent the insured from collecting twice for the same loss The concept of lsquoThird Party Claimsrsquo is based on the sameprinciple(4) Principle of causa proximaThe cause of loss must be direct and an insured one in order to claim ofcompensation(5) Principle of insurable interestThe assured must have insurance interest in the life or property insuredInsurable interest is that interest which considerably alters the position ofthe assured in the event of loss taking place and if the event does not takeplaced he remains in the same old position

25 HISTORY OF INSURANCEThe 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 goods arrived safelyThe concept of insurance as we know today took shape in 1688 at a place

20

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

called Lloydrsquos Coffee House in London where risk bearers used to meet to transact business This coffee house became so popular that Lloydrsquos became the one of the first modern insurance companies by the end of the eighteenth century 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 facilitiesDr Nicholas Barbon set up in 1967 the first fire insurance company knownas the Fire officeThe early history of insurance in India can be traced back to the Vedas TheSanskrit term lsquoYogakshemarsquo (meaning well being) the name of Life Insurance Corporation of Indiarsquos corporate headquarters is found in the RigVeda The Aryans practiced some form of lsquocommunity insurancersquo around 1000 BCLife insurance in its modern form came to India from England in 1818 TheOriental 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 percent The first Indian insurance company the Bombay Mutual Life Assurance Society came into existence in 1870 to cover Indian lives atnormal ratesThe 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 This amended insurance Act looked into investments expenditure and management of these companiesBy the mid- 1950s there were 154 Indian insurers 16 foreign insurers and75 provident societies carrying on life

21

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

insurance business in India Insurance business flourished and so did scams irregularities and dubious investmentpractices by scores of companies As a result the government decided to nationalize the life assurance business in India The Life InsuranceCorporation of India (LIC) was set up in 1956 The nationalization of life insurance was followed by general insurance in 1972

26 TIME LINE IN INSURANCE HISTORY(MAJOR LANDMARKS)

1818 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 InsuranceCompany 1870 Bombay Mutual Life Assurance Society is the first

Indiaowned life insurer 1912 The Indian Life Assurance Company Act enacted

toregulate 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 InsuranceCorporation (GIC) came into being 1993 Malhotra committee was constituted under the

chairmanship of former RBI chief R N Malhotra to

22

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

draw a blue print for insurance sector reforms 1994 Malhotra committee recommended reentry of

private players1048766 1997 IRDA (Insurance Regulatory and Development

Authority) was set up as a regulator of the insurancemarket in India

2000 IRDA started giving license to private insurers ICICIPrudential HDFC were first private players to sellinsurance Policies

2001 Royal Sundaram was the first non-life private player to sell an insurance policy

2002 Bank allowed to sell insurance plans as TPAs enter the scene insurers start setting non-life claims in the cashless mode

27 MEANING OF LIFE INSURANCEThere 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 ndash term and permanentbull 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

23

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

bull Permanent life insurance is life insurance that remains in force until the policy matures unless the owner fails to pay the premium when duebull 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 cash values fixed and known annual premiums and mortality and expense charges will not reduce the cash value shown in the policybull 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 accountPremiums increase the cash account If you want insurance protection only and not a savings and investment product buy a term life insurance policyIf 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 (wwwnaicorgcis) or your local library for information on the financial soundness of insurance companies

28 HISTORY OF LIFE INSURANCERisk 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

24

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Piracy in fact was so prevalent that as a way of spreading the risk a number of ships would carry a portion of another ships cargo so that if one ship was captured the entire shipmentwould not be lost In another part of the world nearly 4500 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 2100BC the Code of Hammurabi granted legal status to the practice It formalized concepts of ldquobottomryrdquo referring to vessel bottoms and ldquorespondentiardquo 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 underwritersLife 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 Romes fall around 450 AD most of the concepts of insurance were abandoned but aspects of it did continue throughthe Middle Ages particularly with merchant and artisan guilds These provided forms of member insurance covering risks like fire flood theft disability death and even imprisonmentDuring 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 instanceyogakshema the name of Life Insurance Corporation of Indias corporate headquarters is derived from the Rig Veda The term suggests that a form of community insurance was prevalent around 1000 BC and

25

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

practiced by the Aryans And similar to ancient Rome burial societies were formed in the Buddhist period to help families build houses and to protect widows and children

Modern InsuranceIllegal 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 Lloyds of London or as they were known then Lloyds Coffee House was the location where merchants ship owners and underwriters met to discuss and transact business dealsWhile serving as a means of risk-avoidance life insurance also appealed strongly to the gambling instincts of Englands burgeoning middle classGambling was so rampant in fact that when newspapers published names of prominent people who were seriously ill bets were placed at Lloydrsquos on their anticipated dates of death Reacting against such practices 79 merchant underwriters broke away in 1769 and two years later formed a ldquoNew Lloydrsquos Coffee Houserdquo that became known as the ldquoreal Lloydrsquosrdquo Making wagers on peoples deaths ceased in 1774 when parliament forbade the practice

Insurance moves to AmericaThe US 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

26

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

public in the United States was issued in Philadelphia on May 22 1761 But it wasnt 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 peoples 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 situationsWith the creation of the automobile public liability insurance which first made its appearance in the 1880s gained importance and acceptanceMore advancement was made to insurance during the process ofindustrialization In 1897 the British government passed the Workmens 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 membersonly 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 providingnot just life insurance but sickness and accident benefits and old-age pensions Employees contribute a certain percentage of the premium for these policies

27

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Final ThoughtsEven 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 Americas size land diversity and the overwhelming desire to be independent As America moved from a 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 industryInsurance became more sophisticated offering new types of coverage and diversified services for an increasingly complex country

29 KEY FEATURES OF LIFE INSURANCE1) 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 policy2) 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

28

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

premiums have been paid and the policy has not been surrendered4) 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 the policy were surrendered before the insureds death5) Dividends -Many life insurance companies issue life insurance policies that entitle the policy owner to share in the companys divisible surplus6) 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 opportunity8) 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 thatwill allow her to convert her policy to a permanent one without providing additional proof of insurability9) Disability Waiver of Premium

29

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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

210 BENEFITS OF LIFE INSURANCE

1) Risk cover -Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future2) 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 individual3) Loans -An individual can easily access loans from different financial institutions by pledging his insurance policies4) Retirement Planning -What had provided protection against the financialconsequences 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 age5) 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

30

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

211 ROLE OF LIFE INSURANCE IN THE GROWTH OF THE ECONOMY

The Life Insurance Industry has an enviable track record among public sector units It has a Consistent profit and dividend paying record accompanied by a steady growth in its financial resources Through investments in the Government sector and socially- oriented sectors the Industry has contributed immensely to the nations development The industry is recognized as one of the largest financial Institutions in the country The ventures initiated by the industry in the areas of Mutual Fund Housing Finance has done exceedingly well in recent years To protect the countrys foreign exchange reserves the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders

31

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

INTRODUCTION TO THE COMPANY

31 About Aegon Religare Life Insurance

AEGON one of the worldrsquos largest life insurance and pension groups Religare one of Indiarsquos leading integrated financial services groups and Bennett Coleman amp company Indiarsquos largest media house have come together to launch AEGON Religare Life Insurance Company Limited This venture is dedicated to build a firm future both for customers and employees and will continue to balance a local approach with the power of an expanding global operation We launched our pan-India multi-channel operations in July 2008 with over 30 branches spread across India Our business philosophy is to help people plan their life better We provide high quality advice to our customers and offer superior customer service In an industry first AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication It is also the first company to include the customerrsquos medical report in the policy kitAEGONrsquos businesses serve over 40 million customers in over 20 markets throughout the Americas Europe and Asia with major operations in the United States the Netherlands and the United Kingdom With headquarters in The Hague the Netherlands AEGON companies employ almost 32000 people worldwide

32

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

The companyrsquos common shares are listed on four stock exchanges Amsterdam London New York and Tokyo It manages EUR 351 billion in revenue generating investments AEGON has more than 160 years of experience with its roots going back to 1844 It holds 26 equity in our companyhttpwwwaegoncom

About Religare Enterprises Limited

Religare is a diversified financial services group of India offering a multitude of investment options Financial services which Religare offers can be broadly clubbed across three key verticals - Retail Institutional and Wealth spectrums Religare has also ventured into the alternative investments sphere through its holistic arts initiative and Film fund With a view to expand diversify and introduce offerings benchmarked against global best practices Religare operates in the wealth management space under the brand name Religare Macquarie Private Wealth Religare has a pan India presence 1837 locations across 498 cities and towns It also currently operates from nine international locations following its acquisition of Londons brokerage amp investment firm Hichens Harrison amp Co plc (Now Religare Hichens Harrison Plc)httpwwwreligareinBennett Coleman amp Co Ltd (BCCL) part of the mammoth Times Group is Indiarsquos largest media house It reaches out to 2468 cities and towns all over India The group owns and manages powerful media brands like The Times of India The Economic Times Maharashtra Times Navbharat Times Femina Filmfare Grazia Top Gear Radio Mirchi Zoom Times Now

33

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Times Music Times OOH Private Treaties and indiatimescom All of its brands are multinational in outlook traditional at heart and national in spirit From the very first edition on November 3 1838 the mammoth BCCL Group has come a long way By way of the innovative venture of Times Private Treaties (httpwwwtimesprivatetreatiescom) the BCCL Group holds 30 equity in our company

MILESTONES IN THE HISTORY

Religare is a diversified financial services group of India

offering a multitude of investment options

Religare has a pan India presence 1837 locations across

498 cities and towns It also currently operates from nine

international locations following its acquisition of Londons

brokerage amp investment firm Hichens Harrison amp Co plc

(Now Religare Hichens Harrison Plc)

AEGON Religare Life Insurance launched its pan-India

multi-channel operations in July 2008 with over 30 branches

spread across India in day 1

AEGON Religare is also the first company to include the

customers medical report in the policy kit

34

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

32Role of IT at Aegon Religare Life Insurance

1 Inter Office Connectivity - All their Branch Area and Regional offices will be interconnected to their Data Centre with a 24x7 access to CoreApplications 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 theircustomers

2 Customer Care Centre -They will host a centralized Customer Care Centre 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

3 Web Portal - This portal will be an interface between both internal employeesand their external users Some of the functions included in their portal are Policy Tracking Systems Corporate News Quality Checking System Under Writing Medical System and Agent Management System etc

4 SMS Alerts - SMS Alerts will be provided to their Sales Managers about thelatest happenings like Contests and Campaigns Employee Alerts will include Company News and WelcomeBirthdayAnniversary message etc Customer Alerts will include WelcomeBirthdayAnniversary message Policy Dispatch Details Policy Servicing SMS like Premium Receipt and Renewal

35

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Premium reminders etc

5 Advisor Lounge - It is a dedicated area forAegon Religare Life Insurance AgentsAdvisors 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 across the table and they can create and print quotes The AgentsAdvisors can use this area to service their existing customers

6 Document Management System - DMS will enable both policy issuance and contract servicing through an automated workflow which yields a faster Turn around 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 recordspapers

33CORE VALUES

Aegon Religare Life Insurance Company Limited has some core values which are listed as follows1) Result Oriented2) Performance Driven3) Customer Focused4) Learning and Development Oriented5) Employee Centric6) Informal and Fun

36

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

34 SUBSIDIARY COMPANIES

1 Religare Securities Limited

Equity Broking Online Investment Portal Portfolio Management Services Depository Services

2 Religare Commodities Limited

Commodity Broking

3 Religare Capital Markets Limited

Investment Banking Proposed Institutional Broking

4 Religare Realty Limited

In house Real Estate Management Company

37

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

5 Religare Hichens Harrison

Corporate Broking Institutional Broking Derivatives Sales Corporate Finance

6 Religare Finvest Limited

Lending and Distribution business Proposed Custodial business

7 Religare Insurance Broking Limited

Life Insurance General Insurance Reinsurance

8 Religare Arts Initiative Limited

Business of Art Gallery launched - arts-i

38

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

9 Religare Venture Capital Limited

Private Equity and Investment Manager

10 Religare Asset Management

Religare Asset Management Company (P) Limited is a wholly owned subsidiary of Religare Securities Limited (RSL) which in turn is a 100 subsidiary of Religare Enterprises Limited

Religare Hichens Harrison plc (RHH) is a part of Religare Enterprises Limited (REL) ndash a leading integrated financial services group of India Hichens Harrison amp Co plc (HH) established in 1803 is Londonrsquos oldest brokerage and investment firm with a global footprint Post its acquisition through RELrsquos indirect subsidiary - Religare Capital Markets International (UK) Limited HH has been rechristened as Religare Hichens Harrison plc

39

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

ASSOCIATE COMPANIES

Fortis Healthcare Limited

Super Religare Laboratories Limited (formerly SRL

Ranbaxy)

Religare Wellness Limited (formerly Fortis Healthworld)

Religare Technova Limited

Religare Voyages Limited

RELIGARE JOINT VENTURES

40

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

35HEAD OFFICES AND BRANCHES

There are 50 branches in 19 States through out India

Corporate and Registered Office

AEGON Religare Life Insurance

2nd Floor Paranjpe B Scheme

Subhash Road Near Garware House

Vile Parle (E)

Mumbai - 400 057

Other Branches

1 Ahmedabad

2 Amritsar

41

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

3 Bengaluru- Brigade

4 Bengaluru- Korama

5 Bhopal

6 Bhubaneswar

7 Chandigarh

8 Chennai- Mount Road

9 Coimbatore

10 Dehradun

11 Faridabad

12 Gurgaon

13 Guwahati

14 Hubli

15 Hyderabad- Paniagut

16 Hyderabad- Secunderabad

17 Indore

18 Jaipur

19 Jalandhar

20 Jamshedpur

21 Kanpur

22 Kochi

42

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

23 Kolkata- Dalhousie

24 Kolkata- Garihat

25 Lucknow- Sikander Bad

26 Lucknow- Vidhan sabha Road

27 Ludhiana

28 Managalore

29 Mumbai- Dadar

30 Mumbai- Belapur

31 Mumbai- Kandivali

32 Nagpur

33 Nashik

34 New Delhi- Kailash Colony

35 New Delhi- Pitampura

36 Noida

37 Panipat

38 Panjim

39 Pune- Koregaon Road

40 Pune- Sachapir Street

41 Raipur

42 Rajkot

43

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

43 Ranchi

44 Salem

45 Surat

46 Thriuvananthapuram

47 Thrissur

48 Vadodara

49 Varanasi

4 Product mix41 FINANCIAL FIGURES

The 22-member life insurance company league collected nearly Rs 5053 crore as first year premium in May 09 a 40 percent growth over Rs 3602 crore garnered in April 09 with growth coming from products aimed at individuals ndash both single premium as well as non-single premium

Most of the new entrants such as Aegon Religare

(153 percent) Future Generali Life (67 percent)

IDBI Fortis Life (38 percent) Bharti Axa Life (31

percent) DLF Pramerica (11 percent) and Star Union

44

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Dai-ichi (8 percent) did well in May Only Canara

HSBC OBC Life saw premium collections drop 34

percent to Rs 303 crore

Source-------The Times of

India (Chennai edition)

Within one year of time AEGON Religare issued

27000 policies with 100 crore plus sum assured

42 QUALITY POLICY

Security Providing long term financial security to our

policy holders will be our constant endeavor We will be do

this by offering life insurance and pension products

Trust We appreciate the trust placed by our policy holders

in us Hence we will aim to manage their investments very

carefully and live up to this trust

Innovation Recognizing the different needs of our

customers we will be offering a range of innovative

products to meet these needs

Integrity

45

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Customer centric

People care ldquoone for all and all for onerdquo

Team work

Joy and

Simplicity

43 PRODUCT SCOPE

AEGON Religare Life offers a bouquet of insurance solutions to

meet every need The company caters to both individuals as

well as to companies looking to provide benefits to their

employees

For individuals the company has a range of protection

investment pension and savings plans that assist and nurture

dreams apart from providing protection The customers can

choose from a range of products to suit their life-stage and

needs

The products of the company are categorized into various sections which are as follows

1 Protection

46

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

2 Saving

3 Child

4 Retirement

Protection plan

Secure your family financially with our range of protection

plans that take care of your long-term as well as short-term

requirements - at a fraction of the cost The products are

1 AEGON Religare Level Term plan

2 AEGON Religare Increasing Term plan

3 AEGON Religare Decreasing Term Plan

4 AEGON Religare Group Term Plan

5 AEGON Religare Rural Term Plan

Childs Plan

Protect your childs dreams and save for his her desired future with our child plan

1 AEGON Religare star child Plan

47

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Savings plan

Get the dual benefit of securing your family financially as well

as saving for a brighter future with our ULIP plans

1 AEGON Religare Protect Gain Plan

2 AEGON Religare Premium Gain Plan

Retirement plan

1 AEGON Religare Pension Plan

2 AEGON Religare Insta Pension Plan

PRODUCT PORTFOLIO

48

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

AEGON Religare offers products as per the life stages of the

customers and their respective needs

Your insurance need will change as your life does from starting

to work to enjoying your golden years and all the stages in

between Each one of these stages may pose a different

insurance needcover for you In this section we have drawn up

49

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

the basic life stages and help you analyze various insurance

needs accordingly

LIFE STAGES amp NEEDS IN HAT STAGES

STAGE 1 YOUNG amp SINGLE

An important stage where one lays down the foundation of a

successful life ahead Take advantage of the time and power of

compounding to ensure that you build up your dreams Start

saving early

NEEDS

Save for Home amp Wedding

Tax Planning

Save for Golden Years

50

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

STAGE 2 JUST MARRIED

Marriage brings about a significant change New dreams and

new opportunities also bring in additional responsibilities While

both of you look forward to a happy and secure life it is equally

important to ensure that eventualities donrsquot come in the way of

shaping your dreams

NEEDS

Planning for home securing your home loan liability

Save for vacation

Save for your first child

51

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

STAGE 3 PROUD PARENTS

Once you have children your need for life

insurance is even more You need to protect your family from an

untoward incident Ensure your protection umbrella takes into

account the future cost of securing your childrsquos dream You will

want life to go on for your loved ones and having enough life

insurance is a way to help ensure that

NEEDS

Provide for childrens education

Safeguarding family against loan liabilities

Savings for post-retirement

52

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

STAGE 4 PLANNING FOR RETIREMENT

While you are busy climbing the ladder of success today it is

important for you to take time and plan for your life after

retirement Having an early start for retirement planning can

make a significant difference to your savings Think about your

golden years even before you have reached them The key is to

think ahead and plan well using your time and money

NEEDS ndash

Provide for regular income post retirement

Immediate Tax benefits

Lead a secure independent and comfortable life style

in your retirement years

53

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

CHAPTER ndash 5HUMAN RESOURCE MANAGEMENT

51 RECRUITMENTRecruitment 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 In this company the Sales Manager who recruits the advisorsagents for selling the products of the company does the recruitment The advisors should have at least passed the SSC examination They must pass the prerecruitment examination which is conducted by the Insurance Institute of India Mumbai or any other approved examination body After clearing the examination the code will be provided to them and the license will also be given to them the validity the license would be 3 years After all these requirements the person will become an insurance advisor in the company

52 SELECTIONSelection 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

54

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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 theReliance Life Insurance Company Limited is to conduct a personal interviewof an applicant by the Branch Manager2) Project 40 Interview -After clearing the personal interview the project 40interview will be taken by the Branch Manager In this step the applicantshould have to make a list of 40 and then start the business with them3) Interview with Regional Head -After clearing the project 40 interview the applicantshould be interviewed by the Regional Head who will check hisherperformance4) Negotiation -After clearing the interview with Regional Head thenegotiation will be provided to the applicant5) Medical Examination -After that the medical check up should e made to theapplicant6) Selection -After clearing all the above steps the applicant should beappointedselected as a Sales Manager in the company

55

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Requirements of Sales Manager-The Sales Manager should possess thefollowing things-1 They should be an MBA2 The age of them should be between 25 to 35 years3 They should have good communication skill4 They should have at least sales experience of 3 years5 They should have the capability to handle the team6 Their job profile includes recruitment training guiding motivatingand in turn getting business out of a team

53 TRAINING AND DEVELOPMENT-Training and Development is any attempt to improve current or future employee performance by increasing an employeersquos ability to perform through learning usually by changing the employeersquos attitude or increasing hisher skills and knowledge The need for training and development is determined by the employeersquos performance deficiency computed as followsTraining amp Development = Standard Performance ndash 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

56

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

be conducted at NIS SPARTA The NIS SPARTA Institute has more than 150 batches and is trained over 3000 agents for mostof the private insurance companies This institute is approved by IDRA to train agentsadvisors

54 CAREER DEVELOPMENTThey are also providing career development plans which will identify potential and create avenues for growth

55 COMMUNICATIONCommunication is the process through which an individual can 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 mannerBRANCHBRANCH BRANCHREGIONALC M OREGIONALREGIONALCHANNELHEADC E O

Explanations of the diagram-The communication is flow between Branch to BranchWithin a branch it flows between Branch Manager to Sales Managers and Sales Managers to AgentsAdvisors and then

57

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Branch Head to Regional Head then different Regional Head to Regional Head then Regional Head to Channel Head then to Chief Marketing Officer (CMO) then to Chief Executive Officer (CEO)

56 INCENTIVESIncentives 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

57 SERVICESThey are offering following certain services to their employees1) They are providing knowledge sharing and certification practices2) They are planned team building and fun events3) They are creating Reliance Life Insurance family which includes employees associates and their families4) Reliance Life Insurance in a team building mode and is looking for performance driven achievement oriented and challenge loving performance

58 PERFORMANCE APPRAISALPerformance appraisal is the systematic evaluation of the individual with respect to hisher performance on the job and hisher potential for development Performance appraisal is a formal structured system of measuring and evaluating an employeersquos 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

58

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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 performance of the advisorsagents If the performance is best then heshe will be prompted

59 ORGANIZATION FORM AND STRUCTURECEOCMOChannel HeadRegional HeadBranch HeadSalesC MEOanagerAdvisorsAgentsCustomers

510 DEPARTMENTThey are providing following areas or departments1) Retail Sales2) Under Writing3) Actuarial4) Insurance Operations5) Customer Service6) Quality and Processes7) Human Resources

59

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

8) Finance

6MARKETING DEPARTMENT

61 COMPARATIVE STUDYPresently there are 15 major Life insurance companies in the countryThere 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 7426 joint venturebetween Birla group and Sun Life Financial It is a private sector company The company was registered on 3112001 The market share for FY 2005- 06 was 189

HDFC ndash Standard -HDFC standard is a 7426 joint venture between HDFC andStandard Life It is a private sector company The company was registered on 23102000 The market share for FY 2005-06 was 287

ICICI Prudential Life Insurance -

60

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

ICICI Prudential Life is a 7426 joint venture between ICICIand Prudential It is a private sector company The company was registered on 24112000 The market share for FY 2005-06 was 735

Life Insurance Corporation of India (LIC) -Life Insurance Corporation of India is a 100 government heldPublic Sector Company Being the first to be established LIC is the forerunner in the Life Insurance sector The market share for FY 2005-06 was 7144

Kotak Mahindra OLD Mutual -Kotak Mahindra OLD Mutual is a 7426 joint venture betweenKotak Mahindra bank and Old Mutual It is a private sector company The company was registered on 1012001 The market share for FY 2005-06 was 111

Max New York Life -Max New York Life is a 7426 joint venture between J amp BankPallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 123

Aviva Life Insurance India -Aviva Life insurance is a 7426 joint venture between Aviva andDabur It is a private sector company The company was registered on 1452002 The market share for FY 2005-06 was 114

ING Vysya Life insurance -

61

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

ING Vysya Life Insurance is joint venture between Exide(50) Gujarat Cements (1487) Enam (913) and ING (26 ) It is a private sector company The company was registered on 282001 The market share for FY 2005-06 is 079

Met Life India -Met Life India is a 7426 joint venture between 7426 JVbetween J amp Bank Pallonji amp Co and MetLife It is a private sector company The company was registered on 682001 The market share for FY 2005-06 was 040

Bajaj Allianz Life Insurance Co -Bajaj Allianz Life Insurance Company is a 74 26 Joint venture between Bajaj Auto limited and Allianz AIG The company wasregistered on 382001 The market share for FY 2005-06 was 756

SBI Life Insurance Company Ltd -SBI Life Insurance Company is a 74 26 Joint venture betweenSBI and Cardiff SA The company was registered on 3132001It is a private sector company The market share for FY 2005-06 was 231

The TATA AIG Group -TATA AIG group is a 7426 JV between Tata Group and AIG It belongs to the private sector The company was registered on 1222001 The market share for FY 2005-06 was 129

62

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Sahara India Life Insurance Company Ltd -First Wholly Indian Owned Private Life Insurance CompanyThe Company commenced operations from 30th October 2004 The market share for FY 2005-06 was 006

Shriram life insurance company Ltd -Shriram Life is a recent entrant into the life insurance sectorIt is a 7426 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

2) Market Share -Sr No Insurer Market Share ()1 LIC 71442 Bajaj Allianz 7563 ICICI Prudential 7354 HDFC Standard 2875 SBI Life 2316 Birla SunLife 1897 Tata AIG 1298 Max New York 1239 Aviva 11410 Kotak Mahindra OLD Mutual 11111 ING Vysya 07912 Reliance Life 05413 MetLife 0414 Sahara Life 00615 Shriram Life 003

63

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Capital Fund -Capital Fund of Private Companies (Rs in Crore )

ICICI Prudential----------------------------------------- 375Max New York -------------------------------------------250HDFC Standard ------------------------------------------218Bajaj Allianz ---------------------------------------------200Tata AIG --------------------------------------------------183Birla Sun Life --------------------------------------------180AVIVA ----------------------------------------------------155OM Kotak -------------------------------------------------153Reliance Life ----------------------------------------------126SBI Life ----------------------------------------------------125Met Life---------------------------------------------------- 110ING Vysya---------------------- ---------------------------110

CHAPTER ndash 7

RESEARCH METHODOLOGY

71 OBJECTIVES OF STUDY1) To get some good market exposure by dealing with the prospects face to face2) To improve our ability to sell a financial product like lifeinsurance3) To know the perception of the consumer about life insurance

64

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

4) To get a deep knowledge of the financial product like insurance5) 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

72 QUESTIONNAIREIt 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 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 customerI have made questionnaire consisting seventeen questions to get customerrsquos 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 ie whether they want to invest where thy want to invest up to what amount and since when

73 SAMPLING METHOD AND SAMPLE SIZEIntroduction-

65

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Any organization whether big or small private or public needdifferent 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 librariesPrimary 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 people I have visited them personally to get dataSample size -I have taken sample size of 50 respondents Because the population is too large so it is difficult to survey

74 LIMITATIONSI am a human hang so there is some limitation of the humanhangs which is reflected in this researchThe 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 bhubaneswar city2) The opinion expressed by the respondents may be biased3) The attitude of the research might be biased4) One of the most influencing and most critical limitations is that I am not trained for the research study and this is my first

66

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

study I tried hard to come at conclusion but there is lack of expertise5) Another limitation is that there is lack of time If I give more time then studies will be more effective There are some limitations of this study But in spite of their limitation I worked with the enthusiasm And I tried to give the best results to theresearch of this report

75 ANALYSIS OF QUESTIONNAIREHere I have formed a questionnaire to study why people go for life insurance What is peoplersquos 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 publicAnalysis-I have used pie charts and some other statistical measures to analyze the questions

67

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover(d) ReturnYield

MOTIVE NOTAX 20SAVING 5RISK COVERAGE 23RETURNYIELD 2TOTAL 50

There could be any motive of people behind investing in alife insurance policy The main purpose of life insurance is theRisk cover of onersquos life But some people consider different advantages of a life insurance policy Some people consider Tax benefit as the main advantage of life insurance Some believe that life insurance is an investment so they tend to invest in life insurance While some people believe that it is a compulsory saving Now letrsquos see what all people say 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 Saving We foundedfrom 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

68

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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 increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those thingsHere we can see that majority of the people tend to invest in life insurance for the risk coverage The next preferred option is Tax 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 samplewe 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 gainingcommand Also the number of those people who wish to invest for return is also increasingAccording to a life insurance expert (Vinod Thakkar ) life insurance is for protection first then for Savings and Tax benefits all those things

Q2 Rank the above motives according to your preferenceMOTIVE OF INVESTMENT

TAX BENEFIT SAVINGS RISK COVER RETURNYIELD

69

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

21 3 24 119 11 16 48 25 7 102 11 3 35

We can see from the table and the 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

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

This is a very crucial question as most of the people are not much familiar about different life insurance plans offered by different life insurance companies so people take help of the life

70

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

insurance agent and as he guides understanding the needs of the individual people would invest Here one hazardous factor is the moral hazard People tend to invest in life insurance plans to maintain relations though they are not in need of life insuranceAlso sometimes it depends upon the convincing power of the agent Here we can see that majority people (58) decides on their about investing in life insurance 28 persons decides as per the guidance of the agent

SOURCE NOON MY OWN 29FAMILY DECISION 7EMPLOYER DECIDES 0AGENT GUIDANCE 14TOTAL 50There is no contribution of employers in the decision of onersquos investment in life insurance 14 people invest in life insurance as per the family decision

Q4 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

71

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

This is another crucial question as there are number of products offered by 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 policies ahead Now letrsquos find out what people have to say

Type of policy N0Term Assurance 9Whole Life 9Endowment 7Combined 19ULIPs 6TOTAL 50

As it is evident from the chart and 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

Q5 Would you prefer Aegon ReligareLife Insurance or LIC for buying the life insurance policy(a) AegonReligare Life Insurance(b) LIC

72

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

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 hadthe 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 insurersAegonReligare 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 AegonReligare life insurance as compared to LIC in todayrsquos environment Now letrsquos see what people say

Particulars NoAegon Religare Life Insurance 15LIC 35TOTAL 50As evident from the chart that 30 of people would prefer AegonReligare Life Insurance while 70 would prefer LIC

Personal Details -1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 65

73

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

Age No18 to 30 531 to 50 3051 to 65 15TOTAL 50

As evident from the chart 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(a) Service(b) Business(c) Profession(d) Housewife(e) Retired

Occupation NoService 5Business 15Profession 10Housewife 5Retired 15TOTAL 50

As the evident from the chart that out of 50 respondents 10 are of service men 30 are of business men 20 are of

74

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

professions 10 are of housewives and remaining 30 are of retired

3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 500000

Income (Per Annum) No50000 to 100000 10100000 to 500000 25More than 500000 15TOTAL 50

As the evident from the chart out of 50 respondents 20 are earning annually between 50000 to 100000 50 are earning between 100000 to 500000 and 30 are earning more than 500000

4) Family members(a) 2(b) 3(c) 4(d) More than 4

Family Members No2 53 154 20

75

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

More than 4 10TOTAL 50

As the evident from the chart 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

79 SWOT ANALYSIS

SWOT analysis is the analysis of the internal and external factors which have impact on the survival of any organization Now letrsquos make SWOT analysis for reliance Life Insurance Company Limited

STRENGTHS1) The brand name is enough to sell the products easily2) Private placement of Rs 10000 crs worth of securities with RBI by the government Led to an improvement in market securities3) Strong liquidity from FII was the major reason for the up move4) Range of products5) Religare has a long and strong history of solvency financialstability

WEAKNESSES

76

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

1) Newly established company so people seems it risky2) Lack of staff3) Lack of advertisement so most of the customers are not aware of the AegonReligare Life Insurance

OPPORTUNITY1) There is a vast untapped market in India The life insurancepenetration in India is approximately 25 So it has largepotential

2) Intention of traditional products is to encourage long termregular and disciplined savings to systematically build up atarget fund3) The average insurance premium being collected by thecompany has been growing exponentially year on year

THREATS1) The main threat is from the other players who have grabbedapproximately 15 of the market share2) As the government has scrapped the rebate on the life insurance premium the people who used to invest in life insurance for the sole motive of tax benefit may turn to other instruments

77

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

CONCLUSION 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

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

As far as the comparison of Reliance Life Insurance and other players is concerned there are both positive as well as negative impacts on both the sides

For Aegon Religare Life Insurance the negative aspect is that its market share is low

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

But the positive impact is that the life insurance awareness has increased and the business of Reliance Life Insurance has increased

78

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

CHAPTER ndash 10ANNEXURE1048766 QuestionnaireSurvey by student of IITTMOn Life InsuranceNAME ___Aegon Religare ________________________________________

Q1 What is your main motive behind investing in life insurance(a) Tax Benefit(b) Savings(c) Risk Cover (d) ReturnYield

Q3 How do you decide about investing in life insurance(a) On my own(b) family decision(c) Employer decides(d) as per the guidance of agent

Q4 Which life insurance policy would you prefer to buy(a) Term Assurance(b) Whole Life(c) Endowment(d) Combination of Whole Life and Endowment

79

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

(e) Unit Linked

Q5 Would you prefer Reliance Life Insurance or LIC for buying thelife insurance policy(a) Reliance Life Insurance(b) LIC

PERSONAL DETAILS1) Age(a) 18 to 30(b) 31 to 50(c) 51 to 652) Occupation(a) Service(b) Business (c) Profession(d) Housewife(e) Retired3) Income(a) 50000 to 100000(b) 100000 to 500000(c) More than 5000004) Family members(a) 2(b) 3(c) 4(d) More than

80

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

CHAPTER ndash 9BIBLIOGRAPHY AND REFERENCES

wwwaegonreligarecom

wwwirdacom

wwwindiainfolinecom

wwwbimaonlinecom

wwwgooglecom

1048766

1 Life Time Magazine of AegonReligare Life Insurance2Net Bios Computer Academyrsquos Life Insurance Book3Broachers of AegonReligare Life Insurance

81

82