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SUMMER TRAINING PROJECT REPORTON

(Consumer behavior in the Insurance sector with special reference to SBI LifeInsurance)

SUBMITTED BYSHEETAL NAGAR

0161921708

STUDENT OF

LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT &SCIENCES

MANDI ROAD, NEW DELHI-110047

FOR THE PARTIAL FULFILLMENTOF

BACHELOR IN BUSINESS MANAGEMENT

UNDER THE SUPERVISIONOF

Mr. Harvinder Balhara(Unit manager of SBI Life)

SUBMITTED TO

GURU GOBIND SINGH INDRAPASTHA UNIVERSITYDELHI, INDIA

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STATE BANK OF INDIA LIFE INSURANCE COMPANY LTD .

CERTIFICATE

Certified that this project reportConsumer Behavior in the Insurance Sector isthe bonafide work of Sheetal nagar who carried out the project work under thesupervision of Miss. Gayatri Kumar.

SIGNATURE SIGNATURE

Dr. Rakesh Kumar Gupta Miss. Gayatri Kumar HEAD OF THE DEPARTMENT Project InchargeBBA BBALingayas Lalita Devi Institute of Lingayas Lalita DeviManagement & Sciences, Institute of Management &Mandi Road, Sciences, Mandi Road,New Delhi-110047 New Delhi-110047

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DECLARATION

I hereby declare that the project work entitled Consumer Behavior In TInsurance Sector submitted to the Guru Gobind Singh Indrapastha University, record of an original work done by me under the guidance of Miss. Gayatri KumFaculty Member, LINGAYAS LALITA DEVI INSTITUTE OFMANAGEMENT & SCIENCES , and this project work has not performed thebasis for the award of any Degree to the best of my knowledge.

SHEETAL NAGAR, 0161921708

( )

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ACKNOWLEDGEMENT

The project aims at understanding the behavior of Consumer in the insurance sector with spreference to SBI Life Insurance and its impact on the Indian insurance sector. This project whas been a great experience on consumer behavior of SBI Life. I have completed this probased on the primary and secondary research, under the guidance of Mr. Harinder Balh(Industry Guide).This work would not have been possible without the help, cooperation, constructive suggeand well wishes of many people. I would like to thank all of them, as I mention a few here.

I owe my profound respect to Mr. Harinder Balhara, my project guide, and express my dsense of gratitude and indebtedness for their inspirations, valuable and scholarly guidaimperative suggestions and personal attention at each stage of the Work. Their gamuknowledge, dedication towards research, exemplary devotion and trust towards me has unique and is the prime key behind the success of this project.I would like to thank Mr. Harinder Balhara for his guidance and enriching my thoughts infield from different perspectives. I would like to thank all respondents, without whcooperation, my study would not have been completed.Last but not the least, I feel indebted to all the people and the organization who have provhelp directly or indirectly, in successful completion of my study. I would also like to thankinternal guides Miss. Gayatri Kumar for accepting my thesis topic and allowing me to wormy desired field of interest and secondly correcting me from time to time.

Date - SHEETAL NAGAR Place - New Delhi .........

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Preface

The project aims at understanding the behavior of Consumer in the insurance sector with spreference to SBI Life Insurance and its impact on the Indian insurance sector.

Research has demonstrated conclusively that it is far more costly to win a new customer thanto maintain an existing one. And there is no better way to retain a customer than to exceedexpectations. For this purpose it is essential to know the level of customer satisfaction. The fof my research was the measurement of customer satisfaction level for the products provideSBI Life. The research was done for the corporate clients of SBI Life and. My job was notto represent the Sales Dept. and collect the feedback from the clients but also to get the mcomplaints resolved through internal counseling. There can be no better opportunity to intwith the external as well as the internal customers of an organization. Finally the results oresearch verify the fact that keeping the customer satisfied is the best strategies to not only rthe existing customers but also to expand the business to new horizons.

In order to gather the most appropriate and accurate data survey was conducted in var

location and markets in Delhi & NCR. The data was assimilated with the help of a questionaimed and designed to extract the most correct and conclusive information.

The consumers were requested to fill the questionnaire and were also asked various orelevant questions revealing detailed information apart from that in the questionnaire.

The survey was conducted successfully and its findings have been studied, analyzed and hav

to a conclusion, included in the report, which could prove to be fruitful for the project.

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TABLE OF CONTENTS

i) Acknowledgement

ii) Preface

iii) Executive Summary

Introduction 08-29

Introduction company 08Introduction about State Bank of India 15Introduction to the product under study SBI Life Insurance 18Introduction to the Life Insurance 21

Project overview 30-39

Title of project 31Objective of Study 31Scope of the study 32Sampling Design 32Key Players in the Indian market 34

Market shares of Key Players 37List of Insurance companies in India 38

Review of literature 40-52

Insurance: Performance evaluated 41Insurance in India 46Comparison of Indian Life Insurance Companies 47The Insurance Regulatory and Development Authority 50Future of Indian Insurance 51

Research Methodology 53-54

Analysis and interpretation 55-79

Conclusion and recommendation 80-84

Conclusion 81Recommendations 83

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Limitations of research 85-86

Bibliography 87

Annexure 1 88-91

Executive Summary

The project addresses the consumer behavior in the Insurance sector, and accesses the imaSBI Life Insurance Ltd, in the eyes of the customer. The project gives an opportunityunderstand the behavior of people towards life insurance and understand their expectattowards life insurance as a product and safety. Through this study, I have been able to ga

information that will help SBI Life Insurance Ltd. Develop its image amongst the exismarket. The sample size of 150 people (from Delhi and NCR region) has furnished a boverview of the current scenario and the standing of the players in the market. Howeverstudy is not conclusive due to constraints mentioned in the thesis report. The research bexploratory in nature, gives ample opportunity to explore newer dimensions which will promore conclusive study in this area. The study has been conducted using certain demograindicators namely, Age, location, income group and Occupation. For every demographic fathe comparative analysis has been conducted among the existing players in the market. Acertain factors like safety, brand image, brand awareness and competitive analysis of prodhas been conducted to get a better understanding of the topic. Lastly, image of SBI LInsurance individually has been assessed with the help of graphical analysis, as in the eacases.

The conclusions drawn have brought out interesting observations. SBI features in the medend in terms of relative standing. It shows higher performance in terms of perception of its sand brand image and qualities of best products when compared relatively. The recommendaare drawn from the conclusions and the find from this project, however subject to constrawill help SBI generate more revenue, customers satisfaction and focus on the areas vital fogrowth.

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INTRODUCTION OF THE COMPANY

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SBI LIFE INSUANCE

SBI Life Insurance Company Limited is a joint venture between the State Bank of IndiaBNP Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs crores and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BParibas Assurance the remaining 26%.State Bank of India enjoys the largest banking franchiIndia. Along with its 6 Associate Banks, SBI Group has the unrivalled strength of o16,000 branches across the country, arguably the largest in the world.BNP Paribas Assurance is the life and property & casualty insurance unit of BNP Paribas - Zones leading Bank. BNP Paribas, part of the worlds top 6 group of banks by market value

a European leader in global banking and financial services, is one of the oldest foreign bwith a presence in India dating back to 1860.SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance proalong with its numerous banking product packages such as housing loans and personal loSBIs access to over 100 million accounts across the country provides a vibrant baseinsurance penetration across every region and economic strata in the country ensuring financial inclusion. Agency Channel, comprising of the most productive force of more

68,000 Insurance Advisors, offers door to door insurance solutions to customers.

BNP Paribas is the 1st largest French company and ranks 5th in the banking industry worldw1st bank in Euro Zone as per Global 2000 Forbes' 2008. It is 6th most valuable internatibanking brand as per Brand Finance 2008.BNP Paribas Assurance is the insurance arm of Paribas - Euro Zone's leading Bank. BNP Paribas, part of the world's top 10 group of bankmarket value and part of Europe top 3 banking companies, is one of the oldest foreign banksa presence in India dating back to 1860. BNP Paribas Assurance is the fourth largest insurance company in France, and a worldwide leader in Creditor insurance products offeprotection to over 50 million clients. BNP Paribas Assurance operates in 41 countries mathrough the bancassurance and partnership model.

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SBI Life has a unique multi-distribution model encompassing vibrant Bancassurance, RAgency, Institutional Alliance and Corporate Solutions distribution channels. SBI Lextensively leverages the State Bank Group relationship as a platform for cross-selling insurproducts along with its numerous banking product packages such as housing loans and perloans. SBIs access to over 100 million accounts across the country provides a vibrant basinsurance penetration across every region and economic strata in the country, thus ensuringfinancial inclusion. Agency Channel, comprising of the most productive force of over 65Insurance Advisors, offers door to door insurance solutions to customers.

Our Mission:

"To emerge as the leading company offering a comprehensive range of life insurance pension products at competitive prices, ensuring high standards of customer satisfactionworld class operating efficiency, and become a model life insurance company in India in theliberalization period".

Our Values:

Trustworthiness

Ambition

Innovation

Dynamism

Excellence

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Key factors

Financial Year 09-10:

Reported a robust Net Profit of Rs.276 Crores Crossed Rs.10,000 Crores in Gross Written Premium (GWP) Ranked No.1, in New Business Premium, amongst private life insurance companies Assets under Management (AUM) grew by 96% to Rs.28, 551 Crores. Globally topped the prestigious MDRT 2009 for having Maximum number of MD

Members. ICRA reaffirmed iAAA rating to SBI Life indicating highest claims paying ability Awarded ISO Certification (ISO/IEC 27001:2005) for Information Security Managem

System (ISMS). Retained ISO 9001:2000 certificate for superior claim settlement process.


Bagged the coveted personal finance award-Outlook Money NDTV Profit best L

Insurer 2008.

Ranked among global top three in terms of number of Million Dollar Round Ta

(MDRT) members.

CRISIL has reaffirmed its highest financial rating AAA/Stable to SBI Life. In 2007

Life became the first life insurer in India to receive this rating from CRISIL, count

leading rating agency.

Recently ICRA, has assigned iAAA rating indicating highest claims paying ability to

Life Insurance.

Retains ISO 9001:2000 certificate for superior claim settlement process.

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Financial Year 07 - 08:

Rated as the The Most Trusted Private Life Insurer according to a survey conducted

Brand Equity in association with AC Nielsen ORG-MARG and the Economic TimIntelligence Bureau.

Became first life insurer in India to receive the highest financial rating AAA fr

CRISIL, the countries best known rating agency in 2007.

Ranked amongst global top five life insurance companies in the number of MD

members.

Forayed into micro insurance with the launch of Grameen Shakti in Bhubaneshw

Orissa for the economically underprivileged sections of society.

Received ISO 9001: 2000 certification for superior claim settlement process.

Became the only domestic life insurer to achieve CMMI Level 3 certification for

processes and software development capabilities

Financial Year 06-07 :

Second consecutive year of Profitability

Leads Private Life Insurance Companies in Lives covered : 6.49 Million lives covered


Becomes the first Life Insurer to make Profits

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CORPORATE & SOCIAL RESPONSIBILITY

GIFT DRISHTI

One of our corporate ethoses, enhancing our SBI Life brand value, is about giving back tosociety. In line with our Corporate Social Responsibility (CSR) initiatives, the causesupporting our Elderly Citizens was initiated. Incidence of cataract blindness, annually at

million, is one of the most prevalent health ailments suffered by old people, particularly in pockets of our country.On the occasion of World Elder's Day on 1st October, CSR initiative - "Gift Drishti" (Restovision) was launched in partnership with Help Age India, a registered national level volunbody, working for the cause of disadvantaged aged persons. Restoring vision is done throIntra Ocular Surgery (IOL). SBI Life employees made monetary contributions to the causeLife donated twice the sum contributed by its employees. Eye sight for thousands of eld

citizens was restored across the rural parts of the country.

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READ INDIA PLEDGE

SBI Life undertook the Corporate Social Responsibility (CSR) initiative, aimed at drivingcause to make children read and write. The campaign, "Read India Pledge" sensitized genpublic towards the cause and urged them to pledge & support the cause monetarily or

devoting time.The campaign was partnered by Pratham, one of the leading child-cause related NGOs and RMirchi, a leading radio station.

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About State Bank of India

State Bank of India is the largest banking and financial services company in India, by almoevery parameter - revenues, profits, assets, market capitalization etc. The bank traces its ancto British India, through the Imperial Bank of India, to the founding in 1806 of the BanCalcutta, making it the oldest commercial bank in the Indian Subcontinent. The GovernmeIndia nationalized the Imperial Bank of India in 1955, with the Reserve Bank of India taki

60% stake, and renamed it the State Bank of India. In 2008, the Government took over the held by the Reserve Bank of India.SBI provides a range of banking products through its vast network in India and oversincluding products aimed at NRIs. The State Bank Group, with over 16000 branches, halargest branch network in India. With an asset base of $260 billion and $195 billion in depoit is a regional banking behemoth. It has a market share among Indian commercial bankabout 20% in deposits and advances, and SBI accounts for almost one-fifth of the nation's loSBI has tried to reduce over-staffing by computerizing operations and "golden handshaschemes that led to a flight of its best and brightest managers. These managers tookretirement allowances and then went on to become senior managers in new private sector baThe State bank of India is the 29th most reputed company in the world according to Forbes. Bank of India is the largest of the Big Four Banks of India, along with ICICI Bank, Axis Band HDFC Bank its main competitors.The bank has 131 overseas offices spread over 32 countries as on 31st Dec 2009. It has branof the parent in Colombo, Dhaka, Frankfurt, Hong Kong, Johannesburg, London and envir

Los Angeles, Male in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It offshore banking units in the Bahamas, Bahrain, and Singapore, and representative officBhutan and Cape Town.SBI operates several foreign subsidiaries or affiliates.In 1990 it established an offshore bank, State Bank of India (Mauritius).
http://en.wikipedia.org/wiki/File:SBI-logo.svg

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In 1982, the bank established a subsidiary, State Bank of India (California), which now has branches - seven branches in the state of California and one in Washington DC that it opene23 November 2009. The seven branches in California are located in Los Angeles, Artesia,Jose, Canoga Park, Fresno, San Diego and Bakersfield.The Israeli branch of the "State Bank of India" located in Ramat Gan.The Canadian subsidiary, State Bank of India (Canada) too dates to 1982. It has seven brancfour in the greater Toronto area and three in British Columbia.In Nigeria SBI operates as INMB Bank. This bank began in 1981 as the Indo-Nigerian MercBank and received permission in 2002 to commence retail banking. It now has five branchNigeria.In Nepal, SBI owns 50% of Nepal SBI Bank, which has branches throughout the countr

Moscow SBI owns 60% of Commercial Bank of India, with Canara Bank owning the resIndonesia it owns 76% of PT Bank Indo Monex. State Bank of India already has a brancShanghai and plans to open one up in Tianjin.

History

The roots of the State Bank of India rest in the first decade of 19th century, when the BanCalcutta, later renamed the Bank of Bengal, was established on 2 June 1806. The Bank of Be

and two other Presidency banks, namely, the Bank of Bombay (incorporated on 15 April 1and the Bank of Madras (incorporated on 1 July 1843). All three Presidency banks wincorporated as joint stock companies, and were the result of the royal charters. These tbanks received the exclusive right to issue paper currency in 1861 with the Paper Currencya right they retained until the formation of the Reserve Bank of India. The Presidency bamalgamated on 27 January 1921, and the reorganized banking entity took as its name ImpBank of India. The Imperial Bank of India continued to remain a joint stock company.Pursuant to the provisions of the State Bank of India Act (1955), the Reserve Bank of Inwhich is India's central bank, acquired a controlling interest in the Imperial Bank of India. OApril 1955 the Imperial Bank of India became the State Bank of India. The Govt. of Inrecently acquired the Reserve Bank of India's stake in SBI so as to remove any conflicinterest because the RBI is the country's banking regulatory authority.

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Offices of the Bank of Bengal

In 1959 the Government passed the State Bank of India (Subsidiary Banks) Act, enablingState Bank of India to take over eight former State-associated banks as its subsidiariesSeptember 13, 2008, State Bank of Saurashtra, one of its Associate Banks, merged with SBank of India. SBI has acquired local banks in rescues. For instance, in 1985, it acquired BaCochin in Kerala, which had 120 branches. SBI was the acquirer as its affiliate, State BanTravancore, already had an extensive network in Kerala.

The subsidiaries of SBI are:

State Bank of Indore

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of Mysore

State Bank of Patiala

State Bank of Travancore
http://en.wikipedia.org/wiki/File:Bank_of_Bengal.jpg

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Branches of SBI

SBI has 21000 ATMs. SBI has 26500 branches, inclusive of branches that belong to its Associate banks. SBI alone has 18500 branches. SBI is the only bank consisting 26% participation in public sector banks and 3

participation in commercial banks in India.

Products of SBI LIFE

SBI Life Insurance offers an extensive range of products to its customers. It has productindividuals as well as for the groups. It also offers a range of health products.

Individual Products

Unit Lined Products

SBI Life - Horizon II

SBI Life - Unit Plus II

SBI Life - Unit Plus Child Plan

SBI Life - Unit Plus Elite Plan

SBI Life - Smart ULIP

SBI Life - MAHA ANAND

Pension Products

SBI Life - Horizon II Pension

SBI Life - Unit Plus II Pension

SBI Life - Immediate Annuity

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Pure Protection Products

SBI Life Swadhan

SBI Life Shield

Protection cum Savings Products

SBI Life - Scholar II

SBI Life - Shubh Nivesh

Money Back Scheme Products

SBI Life - Money Back

SBI Life - Sanjeevan Supreme

For Brokers

SBI Life - SARAL ULIP

Group Products

Group Employee Benefit Products

Retirement Solution

SBI Life - CapAssure Gratuity

SBI Life - CapAssure Superannuation

SBI Life - CapAssure Leave Encashment

SBI Life - DhanrashiSBI Life - Swarna Jeevan

SBI Life - Swarna Ganga

SBI Life - Kalyan ULIP

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Group Protection Plans

SBI Life - Sampoorn Suraksha

SBI Life - Credit Guard

SBI Life - Suraksha Plus

Specialized Term Insurance

SBI Life - Shield

Group Term with ROP

SBI Life - Swadhan (Group)

Group Loan Protection Products

SBI Life - Dhanaraksha Plus SP

SBI Life - Dhanaraksha Plus LPPT

Group Savings Protection Products

SBI Life - Nidhi Raksha RP

Group Micro Insurance

SBI Life - Grameen Shakti

SBI Life - Grameen Super Suraksha

Health Products

SBI Life - Group Criti9

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Introduction to the Life InsuranceInsurance is a mechanism that helps to reduce the effects of such adverse situations. It promto pay to the owner or beneficiary of the asset, a certain sum if the loss occurs. The busineinsurance is related to the protection of the economic values of assets. Assets are insubecause they are likely to be destroyed or made non-functional before the expected life tthrough accidental occurrences.

Concept of Insurance

Insured, are you? The functions of Insurance will give you an idea on how to go ahead witapproach of insurance and what type of insurance to choose. In a layman's words, insurmeans, a guard against pecuniary loss arising on the happening of an unforeseen eventdeveloping economies, the insurance sector still holds a lot of potential which can be tapMajority of the people in the developing countries remains unaware of the functions and benof insurance and it is for this reason that the insurance sector is still to grow.Tangible or intangible an individual can insure anything! Be it a house, car, factory, or

voice of a singer, leg of a footballer, and the hand of an author.....etc. It is possible to insurthese as they have the possibility of becoming non functional by any disaster or an accid

Basic functions of Insurance

1. Primary Functions

2. Secondary Functions

3. Other Functions

Primary functions of insurance

Providing protection The elementary purpose of insurance is to allow security agafuture risk, accidents and uncertainty. Insurance cannot arrest the risk from taking pl

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but can for sure allow for the losses arising with the risk. Insurance is in realitprotective cover against economic loss, by apportioning the risk with others.

Collective risk bearing Insurance is an instrument to share the financial loss. It medium through which few losses are divided among larger number of people. Allinsured add the premiums towards a fund and out of which the persons facing a specrisk is paid.

Evaluating risk Insurance fixes the likely volume of risk by assessing diverse facthat give rise to risk. Risk is the basis for ascertaining the premium rate as well.

Provide Certainty Insurance is a device, which assists in changing uncertaintycertainty.

Secondary functions of insurance Preventing losses Insurance warns individuals and businessmen to embrace approp

device to prevent unfortunate aftermaths of risk by observing safety instructioinstallation of automatic sparkler or alarm systems, etc.

Covering larger risks with small capital Insurance assuages the businessmen frsecurity investments. This is done by paying small amount of premium against larrisks and dubiety.

Helps in the development of larger industries Insurance provides an opportunitydevelop to those larger industries which have more risks in their setting up.

Other functions of insurance Is a savings and investment tool Insurance is the best savings and investment opt

restricting unnecessary expenses by the insured. Also to take the benefit of incomeexemptions, people take up insurance as a good investment option.

Medium of earning foreign exchange Being an international business, any countryearn foreign exchange by way of issue of marine insurance policies and a different oways.

Risk Free trade Insurance boosts exports insurance, making foreign trade risk free the help of different types of policies under marine insurance cover.

Insurance provides indemnity, or reimbursement, in the event of an unanticipated losdisaster. There are different types of insurance policies under the sun cover alm

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anything that one might think of. There are loads of companies who are providing scustomized insurance policies.

History of Insurance:

Insurance began as a way of reducing the risk of traders, as early as 5000 BC in China and BC in Babylon. Life insurance dates only to ancient Rome; "burial clubs" covered the comembers' funeral expenses and helped survivors monetarily. Modern life insurance starte17th century England, originally as insurance for traders : merchants, ship owners underwriters met to discuss deals at Lloyd's Coffee House, predecessor to the famous LloydLondon.

The first insurance company in the United States was formed in Charleston, South Carolin1732, but it provided only fire insurance. The sale of life insurance in the U.S. began in the1760s. The Presbyterian Synods in Philadelphia and New York created the CorporationRelief of Poor and Distressed Widows and Children of Presbyterian Ministers in 17Episcopalian priests organized a similar fund in 1769. Between 1787 and 1837 more thandozen life insurance companies were started, but fewer than half a dozen survived.Prior to the American Civil War, many insurance companies in the United States insured

lives of slaves for their owners. In response to bills passed in California in 2001 and in Illino2003, the companies have been required to search their records for such policies. New Yorkfor example reported that Nautilus sold 485 slaveholder life insurance policies during a twoperiod in the 1840s; they added that their trustees voted to end the sale of such policies 15 ybefore the Emancipation ProclamationThere are two types of Insurance

Life Insurance General Insurance

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Life Insurance

Life insurance or life assurance is a contract between the policy owner and theinsurer , wherethe insurer agrees to pay a designated beneficiary a sum of money upon the occurrence oinsured individual's or individuals'death or other event, such as terminal illness or criticalillness. In return, the policy owner agrees to pay a stipulated amount at regular intervals lump sums. There may be designs in some countries where bills and death expenses plus catfor after funeral expenses should be included in Policy Premium. In the United States,

predominant form simply specifies a lump sum to be paid on the insured's demise.As with mostinsurance policies, life insurance is a contract between the insurer and the poliowner whereby a benefit is paid to the designatedbeneficiaries if an insured event occurs whichis covered by the policy.The value for the policyholder is derived, not from an actual claim event, rather it is the vderived from the 'peace of mind' experienced by the policyholder, due to the negating of advfinancial consequences caused by the death of the Life Assured.To be a life policy the insured event must be based upon the lives of the people named inpolicy.

Types of life insurance

Life insurance may be divided into two basic classes temporary and permanent or followsubclasses - term, universal, whole life and endowment life insurance.

Term Insurance

Term assurance provides life insurance coverage for a specified term of years in exchange specified premium. The policy does not accumulate cash value. Term is generally consid"pure" insurance, where the premium buys protection in the event of death and nothing else.There are three key factors to be considered in term insurance:

1. Face amount (protection or death benefit),2. Premium to be paid (cost to the insured), and
http://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Deathhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Deathhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Beneficiaryhttp://en.wikipedia.org/wiki/Insurance

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3. Length of coverage (term).Various insurance companies sell term insurance with many different combinations of ththree parameters. The face amount can remain constant or decline. The term can be for onmore years. The premium can remain level or increase. Common types of term insurance incLevel, Annual Renewable and Mortgage insurance.Level Term policy has the premium fixed for a period of time longer than a year. These termcommonly 5, 10, 15, 20, 25, and 30 and even 35 years. Level term is often used for long planning and asset management because premiums remain consistent year to year and cabudgeted long term. At the end of the term, some policies contain a renewal or conversoption. Guaranteed Renewal, the insurance company guarantees it will issue a policy of equlesser amount without regard to the insurability of the insured and with a premium set fo

insured's age at that time. Some companies however do not guarantee renewal, and require pof insurability to mitigate their risk and decline renewing higher risk clients (for instance tthat may be terminal). Renewal that requires proof of insurability often includes a converoptions that allows the insured to convert the term program to a permanent one that the insurcompany makes available. This can force clients into a more expensive permanent progbecause of anti selection if they need to continue coverage. Renewal and conversion optionbe very important when selecting a program.Annual renewable term is a one year policy but the insurance company guarantees it will ispolicy of equal or lesser amount without regard to the insurability of the insured and wipremium set for the insured's age at that time.Another common type of term insurance is mortgage insurance, which is usually a lepremium, declining face value policy. The face amount is intended to equal the amount omortgage on the policy owners residence so the mortgage will be paid if the insured dies.A policy holder insures his life for a specified term. If he dies before that specified term i(with the exception of suicide see below), his estate or named beneficiary receives a payout.does not die before the term is up, he receives nothing. Suicide used to be excluded from Ainsurance policies, however, after a number of court judgments against the industry, payouoccur on death by suicide (presumably except for in the unlikely case that it can be shownthe suicide was just to benefit from the policy). Generally, if an insured person commits sui

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within the first two policy years, the insurer will return the premiums paid. However, a dbenefit will usually be paid if the suicide occurs after the two year period.

Permanent Life Insurance

Permanent life insurance is life insurance that remains in force (in-line) until the policy mat(pays out), unless the owner fails to pay the premium when due (the policy expires OR pollapse). The policy cannot be canceled by the insurer for any reason except fraud inapplication, and that cancellation must occur within a period of time defined by law (usuallyyears). Permanent insurance builds a cash value that reduces the amount at risk to the insurcompany and thus the insurance expense over time. This means that a policy with a mildollar face value can be relatively expensive to a 70 year old. The owner can access the monthe cash value by withdrawing money, borrowing the cash value, or surrendering the policyreceiving the surrender value.The four basic types of permanent insurance arewhole life , universal life , limited pay andendowment .Whole life coverage

Whole life insurance provides for a level premium, and a cash value table included in the p

guaranteed by the company. The primary advantages of whole life are guaranteed death benguaranteed cash values, fixed and known annual premiums, and mortality and expense chawill not reduce the cash value shown in the policy. The primary disadvantages of whole lifpremium inflexibility, and the internal rate of return in the policy may not be competitive other savings alternatives. Also, the cash values are generally kept by the insurance compathe time of death, the death benefit only to the beneficiaries. Riders are available that can aone to increase the death benefit by paying additional premium. The death benefit can als

increased through the use of policy dividends. Dividends cannot be guaranteed and mahigher or lower than historical rates over time. Premiums are much higher than term insuranthe short-term, but cumulative premiums are roughly equal if policies are kept in force uaverage life expectancy.Cash value can be accessed at any time through policy "loans" and are received "incomefree". Since these loans decrease the death benefit if not paid back, payback is optional. C

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values support the death benefit so only the death benefit is paid out. If Paid up additionelected, dividend cash values will purchase additional death benefit which will increase the dbenefit of the policy to the named beneficiary.

Universal life coverage

Universal life insurance (UL) is a relatively new insurance product intended to provpermanent insurance coverage with greater flexibility in premium payment and the potentiaa higher internal rate of return. There are several types of universal life insurance policies winclude "interest sensitive" (also known as "traditional fixed universal life insurance"), varuniversal life insurance, and equity indexed universal life insurance.A universal life insurance policy includes a cash account but the cash decreases over ti

Premiums increase the cash account, but, the cost of interest increases each year so the deteriorates over time. Interest is paid within the policy (credited) on the account at a specified by the company, but then mortality charges and administrative costs are then chaagainst (reduce) the cash account. The surrender value of the policy is the amount remainithe cash account less applicable surrender charges, if any. Universal Life does not work recession or low interest rate environment.With all life insurance, there are basically two functions that make it work. There's a mortfunction and a cash function. The mortality function would be the classical notion of poolingwhere the premiums paid by everybody else would cover the death benefit for the one orwho will die for a given period of time. The cash function inherent in all life insurance saysif a person is to reach age 95 to 100 (the age varies depending on state and company), thenpolicy matures and endows the face value of the policy.Actuarially, it is reasoned that out of a group of 1000 people, if even 10 of them live to agethen the mortality function alone will not be able to cover the cash function. So in order to cthe cash function, a minimum rate of investment return on the premiums will be required ievent that a policy matures.Universal life insurance addresses the perceived disadvantages of whole life. Premiumsflexible. Depending on how interest is credited, the internal rate of return can be higher becit moves with prevailing interest rates (interest-sensitive) or the financial markets (EqIndexed Universal Life and Variable Universal Life). Mortality costs and administrative cha

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are known. And cash value may be considered more easily attainable because the ownerdiscontinue premiums if the cash value allows it. And universal life has a more flexible dbenefit because the owner can select one of two death benefit options, Option A and Option Option A pays the face amount at death as it's designed to have the cash value equal the dbenefit at maturity (usually at age 95 or 100). With each premium payment, the policy ownreducing the cost of insurance until the cash value reaches the face amount upon maturity. Bdoes not perform like a whole life policy when each year the costs increase and never stowhole life, the costs are complete within the first few years of the policy.Option B pays the face amount plus the cash value, as it's designed to increase the net dbenefit as cash values accumulate. Option B offers the benefit of an increasing death benevery year that the policy stays in force. The drawback to option B is that because the cash v

is accumulated "on top of" the death benefit, the cost of insurance never decreases as prempayments are made. Thus, as the insured gets older, the policy owner is faced with an increasing cost of insurance (it costs more money to provide the same initial face amouninsurance as the insured gets older).

Limited-pay

Another type of permanent insurance is Limited-pay life insurance, in which all the premiare paid over a specified period after which no additional premiums are due to keep the poliforce. Common limited pay periods include 10-year, 20-year, and paid-up at age 65.

Endowments

Endowments are policies in which the cash value built up inside the policy, equals the dbenefit (face amount) at a certain age. The age this commences is known as the endowmentEndowments are considerably more expensive (in terms of annual premiums) than either wlife or universal life because the premium paying period is shortened and the endowment daearlier.In the United States, the Technical Corrections Act of 1988 tightened the rules on tax she(creating modified endowments). These follow tax rules as annuities and IRAs do.Endowment Insurance is paid out whether the insured lives or dies, after a specific period 15 years) or a specific age (e.g. 65).

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Accidental Death

Accidental death is a limited life insurance that is designed to cover the insured when theyaway due to an accident. Accidents include anything from an injury, but do not typically cany deaths resulting from health problems or suicide. Because they only cover accidents, tpolicies are much less expensive than other life insurances.It is also very commonly offered as "accidental death and dismemberment insurance", known as an AD&D policy. In an AD&D policy, benefits are available not only for accidedeath, but also for loss of limbs or bodily functions such as sight and hearing, etc.Accidental death and AD&D policiesvery rarely pay a benefit; either the cause of death is notcovered, or the coverage is not maintained after the accident until death occurs. To be awa

what coverage they have, an insured should always review their policy for what it coverswhat it excludes. Often, it does not cover an insured that puts themselves at risk in activitiesas: parachuting, flying an airplane, professional sports, or involvement in a war (military or Also, some insurers will exclude death and injury caused by proximate causes due to (bulimited to) racing on wheels and mountaineering.Accidental death benefits can also be added to a standard life insurance policy as a rider. Ifrider is purchased, the policy will generally pay double the face amount if the insured dies dan accident. This used to be commonly referred to as double indemnity coverage. In some csome companies may even offer a triple indemnity cover.

General Insurance

India General Insurance covers almost everything related to property, vehicle, cash, housegoods, health and also one's liability towards others. The basic difference of general insurwith the life insurance policy is that it offers protection against contingencies. Nearly general insurance companies have been nationalized under the General Insurance Busi(Nationalization) Act, 1972, and merged into four companies, namely, National Insurance, India Assurance, Oriental Insurance and United India Insurance.

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PROJECT OVERVIEW

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Title of Project

This project addresses the perception of customers towards existing players in the life insursector, and access the image of SBI Life Insurance in the eyes of the customer. The project gan opportunity to understand the psyche of people towards life insurance and understand expectations towards life insurance as a product. To study markets perception towardsexisting players in the life insurance sector.

Objectives of Study

Analysis of consumer satisfaction and competitive analysis Nokia

To suggest alternatives to SBI Life Insurance to develop its presence in the eyes ofcustomers.

To Study the markets perception towards existing players in the life insurance sector.

Markets perception towards the existing players in the Life insurance sector will givoverview of the image of SBI Life insurance co. This in turn gives an opportunitywork on alternatives that will help SBI Life insurance to develop its own image in eyes of the customer.

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Scope of the study

The scope of the study adopted for this project is exploratory in nature since there ishypothesis that has to be tested.Areas covered

People holding life Insurance policies in Delhi and NCR region were targeted. There an attempt to reach people outside Delhi via e-mail, however the number was minuscule. Sof the areas, specifically, were the followings:-

SaketKhanpur C.PAmbedker nagar Gurgaon

Sampling design

The Sample design process includes five steps as follows:- Defining of the target population Determination of the sampling frame Selection of a sampling technique Determination the sampling size Execution the sample process

Target Population

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The target population is the aggregate of all the elements defined prior to selection of the samSince the thesis involves study of customers perception towards the existing the insuraplayers, the target populations were all the people who hold life insurance policies.

Sample Frame

A Leslie Kish is greatest writer from New York, has observed that a perfect frame is one wevery element appears on the list separately, once, only once and nothing else appears on

the list. For this thesis sampling frame is known because there is a list and set of directionsidentifying target population. A list of policy holders was provided by SBI Life Insuranceprimary data was collected.

Sample Process

The sampling process is the procedure required right from defining a population to the acselection of sample elements. Execution of sampling process requires a detailed specificatiohow the sampling designs decision with respect to the population, sampling frame, sampunit, sampling technique and sample size are to be determined.Total Sampling Size = 150 respondents.

Sampling technique

Sampling techniques can be broadly classified as probability and non-probability. As theresampling frame available so the sampling technique available for this project is non-probaband probability sampling.

Out of the available techniques Judgment and Convenience sampling were use.

Justification of the Study

If we have a glimpse of the global life insurance scenario, we find that while the growtheither become stagnant or turned negative in the developed countries, it has shown a g

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potential in the emerging markets. India in particular has revealed a buoyant market whichgrown at a CAGR of 23% since the opening up to the sector.The potential for insurance is vast in India. Today, the total insurance penetration, i.e. premias percent of GDP, is about 2.88 in India against a world average of 8.06. This shows potential for growth of the insurance industry and provides a great opportunity to all the plain this sector.Yet, nearly 80 percent of the Indian population is without life insurance cover while heinsurance and non-life insurance continues to be below international standards. And this pathe population is also subject to weak social security and pension systems with hardly anyage income security. This itself is an indicator that the growth potential for the insurance sis immense.

Despite these impressive growth rates, this market is still relatively small, accountcollectively for only 2.2% of global insurance premiums. Nevertheless, its huge economypopulation size, coupled with rapid industrialization and globalization, should create amopportunities for the development of insurance. In particular, liberalization and deregulatiorendering this newly de-monopolized market more accessible and attractive to foreign insuCurrently, India restricts foreign equity participation to 26% in joint ventures. At the same tinsurance regulations are maturing to levels commensurate with international best practices.

Key Players in the Indian Market

LIC (Life Insurance Corporation of India) still remains the largest life insurance compaccounting for 64% market share. Its share, however, has dropped from 74% a year befmainly owing to entry of private players with innovative products and better sales force. WLIC dominates the Indian life insurance market with nearly 80 per cent of the market sha

has 248 branches, 113000 employees and over one million agents. It has also been improinternal processes and systems, upgrading skills of its agency force and managers and develoinnovative products. LIC sold 1.69 crore policies during the year compared to 18 lakh polsold by all the private players. In 2009-10, the LIC has booked new business of Rs. 70,8against Rs. 52,953cr last year. LICs growth in new business has been more than double

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growth rate recorded by the entire private life insurance industry. Another surprise in 200has been the rebounding of the Life Insurance Corporation, which has increased its market from 60.7% to 64.8% after a 33% growth, which is the highest among all established compa

SBI Life insurance Co Ltd has moved up the rankings to become the leading private insurterms of new business. With the total new business of Rs.7,040 crore in 2009-2010, which increase of 30% over last years premium income, the company has managed to grab a 6share of the life insurance market, this comes against ICICI Prudentials recorded new busof RS. 6,334 crore, which is a 7% decline compared to the business it did in the corresponperiod last year. The company ranked second (after LIC) in number of policies sold in 200with total market share of 6.44%. The data released by IRDA, however, give an indicatio

only the business from new policies. SBI Life Insurance Co Ltd in terms of new numbepolicies sold, the company ranked 6th in 2007-08. New premium collection for the companyRs 4,792.66 crore in 2007-08, an increase of 87% over last year.

ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in InBut now it has moved down the rankings 2nd from the leading private insurer in terms of newbusiness. With the total new business of Rs. 6,334.31cr in 2009-2010, which is a 7% decgrowth compared to the business it did in the corresponding period last year. It experiengrowth of 58% in new business premium, accounting for increase in market share to 8.93%2007-08 from 6.97% in 2006-07. It is on the 2nd position among the private players with a marketshare of 5.80 per cent after its premium collection totaled Rs. 6,334.31cr, whereas its premium in 2008-09 was Rs. 6,812.52cr

Bajaj Allianz Life Insurance Co Ltd is the 3rd highest private life insurance company in India.With the total new business of Rs. 4,451.09cr in 2009-2010, which is a 0.90% decline grocompared to the business it did in the corresponding period last year. Bajaj Allianz LInsurance Co Ltd has reported a growth of 52% and its market share went up to 6.98% in 208 form 5.66% in 2006-07 but in 2009-10 its market share went down to 4.07% in 2009-10 6.98% in 2007-08. Bajaj Allianz with sales of Rs. 4.9 billion had a market share of 2.86 per Birla Sun Life with sales of Rs. 4.8 billion had a market share of 2.81%; ICICI has emerged

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key player. Initially, the company drove new business by opening branches in new locations.focus has now shifted to penetrating these locations for increasing market share. The compaalso trying to get higher penetration in the High Net Worth segment. The company has sebank assurance partners and this is the largest contributor to no- agency business. It also hkey non-bank partners and 800 financial sales consultants. 5 of September 2004, it hadbranches in 60+ locations. It took the initiative in launching non- traditional products suclife-stage products, retirement solutions and child plans. It also focused on Unit Linked P(ULIPs) to target new consumer segments. It has a presence in 15 states through partnerarrangements and as of 2003-04, it sold 64764 policies in rural areas.

Reliance Insurance Co Ltd has reported growth of 11.57% in 2009-10. Its total new busi

generated is Rs. 3,920.52crore as against Rs. 3,514.06 crore and its market share is 3.59%2009-10. The company is remaining on 4th position in 2009-10 from 2007-08Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore in 2007-08 and its mshare went up to 2.96% from 1.23% a year back.

HDFC Standard Life has established its branches in 110 locations and is targeting non- mtowns. It is hoping to leverage its pedigree/ parentage to gain more customer acceptanceresult, it is focusing on quality not just volume growth. Bajaj Allianz has been focusinsecond tier towns and cities which are yet to witness the entry of other life insurance plaapart from LIC. It is using first mover advantage by opening an office in the most promilocation in a non-metro town. It hires local people who are trained. Its mantra is to develop the indispensable infrastructure so that it can match the pricing of LIC. Apart from that it clthat it is the only private player to provide policy servicing at the branch level. StandChartered is currently its biggest partner followed by Syndicate Bank and Centurion Bank.biggest challenge that the company faces is the weak infrastructure-particularly transportcommunications- in the smaller cities. It is also facing a challenge in terms of banking chanparticularly for customers who bank with cooperative banks, where delays in clearing cheare inevitable. Tied agencies comprise the biggest channel (968%) of new business acquisi

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for Bajaj Allianz. Bank assurance (27%) is the other significant channel of growth forcompany.

Max New York Life Insurance Co Ltd has reported growth of 0.24% in 2009-10 from73%2008-09. Its total new business generated is Rs. 1,848.07cr as against Rs. 1,843.71crore antotal new business generated in 2007-08 was Rs 641.83 crore as against Rs 387.51 crore in 207. Its market share is 2.71% in 2009-10. The company is remaining on 7th position in 2009company was pushed down to the 8th position from 7th in 2007-08.

SBI Life Life Insurance Co Ltd has reported growth of 0.67% decline in 2009-10. Its totalbusiness generated is Rs. 1,333.98 crore as against Rs. 1,343.03 crore. SBI Life Mahindra

Mutual Life Insurance Ltd the fiscal 2007-08, the company reported growth of 80%, mofrom the 11th position to 9th. It captured a market share of 1.19% in 2007-08. Last yearcompany doubled its branch network to 150 from 74.

Market Shares of Key Players

LIC 64.86%SBI Life 6.44%ICICI Prudential 5.80%Bajaj Allianz 4.07%Reliance Life 3.59%HDFC Standard 2.98%Birla Sun life 2.71%Max-NYL 1.69%Kotak Mahindra Old Mutual 1.22%Tata AIG 1.21%MetLife 0.98%

Source: Economic Times, 22 Apr 2010

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List of Insurance companies in India

LIFE INSURERS Websites

PUBLIC SECTOR

Life Insurance Corporation of India www.licindia.com

PRIVATE SECTOR

SBI Life Insurance Company Limited www.sbilife.co.in

Birla Sun-Life Insurance Company Limited www.birlasunlife.com

HDFC Standard Life Insurance Co. Limited www.hdfcinsurance.com

ICICI Prudential Life Insurance Co. Limited www.iciciprulife.com

ING Vysya Life Insurance Company Limited www.ingvysayalife.com

Max New York Life Insurance Co. Limited www.maxnewyorklife.com

MetLife Insurance Company Limited www.metlife.com

Om Kotak Mahindra Life Insurance Co. Ltd. www.omkotakmahnidra.com

Allianz Bajaj Life Insurance Company Limited www.allianzbajaj.co.in

TATA AIG Life Insurance Company Limited www.tata-aig.com

GENERAL INSURERSPUBLIC SECTOR

National Insurance Company Limited www.nationalinsuranceindia.com

New India Assurance Company Limited www.niacl.com

Oriental Insurance Company Limited www.orientalinsurance.nic.in

United India Insurance Company Limited www.uiic.co.in

PRIVATE SECTOR

Bajaj Allianz General Insurance Co. Limited www.bajajallianz.co.inICICI Lombard General Insurance Co. Ltd. www.icicilombard.com

IFFCO-Tokio General Insurance Co. Ltd. www.itgi.co.in

Reliance General Insurance Co. Limited www.ril.com

Royal Sundaram Alliance Insurance Co. Ltd. www.royalsun.com

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TATA AIG General Insurance Co. Limited www.tata-aig.com

Export Credit Guarantee Corporation www.ecgcindia.com

Schedule of research

Project title designing

Contacting the customers from the primary data base

Develop an understanding based on the responses to suggest alternatives for SBI life

Designing the project approach

Developing a secondary data base.

Getting a follow up from the faculty guide and the industry guide

Designing the questionnaire Documenting the responses and discussing the advance with industry guide and fac

guide Documenting the responses and discussing the advance with industry guide and fac

guide Start the formal documentation before the end of the week.

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REVIEW OF LITERATURE

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Insurance: Performance evaluated

India Life Insurance industry came into being with the establishment of Life InsuraCorporation (LIC) in India in 1956. Till the time Insurance Regulatory and DevelopmAuthority (IRDA) Act was implemented in the year 1999, private companies were controllethe LIC of India. Since 1999 onwards the market was opened for operations of private compalso in the insurance sector.The life insurance sector of India has added up to 4.1% of the GDP in 2009; a considergrowth was recorded since the time the sector was opened for the private companies. contribution in FDI by the life insurance segment was recorded at US $ 1.3 billion, even ththe government is likely to increase the FDI cap limit from 26% to 49%, a bill of whicpending at the Rajya Sabha.The year 2009-10 also saw private sector insurance company, Aviva Life Insurance establisnine unit-linked plans, in line with the recent IRDA guidelines featuring enhanced and hi

internal rate of return (IRRs).As per the data provided by the IRDA, the businesses of the life insurance companies hgrowth of 22% at US$ 12 billion in April-November 2009-10, in comparison to the US$billion during the same period last year. Such a huge sale of single premium policies ledindustry to record a raise of 53.25% in November 2009 alone.With the registration of India First Life Insurance Company Limited, a joint stake life insurcompany encouraged by Bank of Baroda and Andhra Bank of India and Legal & General MEast Limited, UK, the total number of life insurers registration with the Insurance RegulaDevelopment Authority (IRDA) has increased to 23.According to industry body, Life Insurance Council, The life insurance industry had earlier anticipated to grow by 15% in the year 2009 - 10 and surpass the US$ 54.1 billion mark in premium income by March-end. This growth in premium income includes new business as

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as renewals, driven by increasing awareness on the value of getting insure

The US$ 41-billion Indian insurance industry made a grand return with better performancthe April-November 2009 period. Life insurance in India recorded the first year prem(inclusive of Single Premium) segment accounting to US$ 24 billion.FDI Policy in Indian Life Insurance IndustryThe FDI limit in the insurance sector has been capped at 26% for the foreign marketers bugovernment is thinking to increase it to 49% and a bill of this offer is pending at the RSabha. The LIC is still the major company in the life insurance sector but with suchemergence of the private companies, providing a range of moneymaking policies and investchances for people from all walks of life the situation is fast changing. The Unit Lin

Investment Plans (ULIP) offering life cover as well as scope for savings and investment desextra acknowledgement in this issue. Furthermore, with minimum lock-in period of three ysuch plans are subjected to avoid miss usage of important tax benefits.In the public sector of the India life insurance, the Life Insurance Company of India funcsolely. Some of the private companies operating in the life Insurance Sector are:ICICI Prudential Life Insurance, SBI Life, Birla Sun Life, Tata AIG Life, Aviva Life InsuranKotak Mahindra Life Insurance, Bajaj Allianz Life, Ing Vyasya Life Insurance, Indian insurcompanies play a major role in the economy of India as well as on the lives of the people ofcountry. As the population of India is getting more affluent and globalized these days,insurance sector, a federal subject in India, is growing at an enviable pace. With an increamarket, one can find the presence of good number of companies in the Indian insurance mawhich lead to a stiff competition among themselves.The insurance sector in India has seen several changes over the years. The year 1999 was significant in this perspective when government opened up the insurance market for the prcompanies to offer insurance. It also allowed FDI up to 26%. As a result, besides governmowned players, a number of private insurance companies have also plunged into the Ininsurance market. However, the largest insurance company in India is still owned by government.

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WHAT A LIFE!

Insurers New premium Growth

(%)

Market

Share (%)2009-10 (Rs Cr) 2008-09 (Rs Cr)LIC 70,891.05 52,953.92 33.87 64.86SBI Life 7,040.66 5,386.46 30.71 6.44ICICI Prudential 6,334.31 6,812.52 -7.02 5.80Bajaj Allianz 4,451.09 4,491.63 -0.90 4.07

Reliance Life 3,920.52 3,514.06 11.57 3.59HDFC Standard 3,261.14 2,644.03 23.34 2.98Birla Sunlife 2,958.45 2,823.91 4.76 2.70Max New York Life 1,848.07 1,843.71 0.24 1.69Kotak Mahindra OldMutual

1,333.98 1,343.03 -0.67 1.22

Tata AIG 1,321.54 1,142.45 15.68 1.21Met Life 1,067.81 1,145.63 -6.79 8.98Aviva 798.66 723.66 10.36 0.73ING Vysya 642.55 688.17 -6.63 0.59Bharti Axa Life 437.67 292.58 49.59 0.40Shriram Life 420.42 313.17 34.25 0.38Sahara Life 127.01 134.38 5.48 0.12

LIC (Life Insurance Corporation of India) still remains the largest life insurance compaccounting for 64.86% market share. Its share, however, has dropped from 74% a year be

mainly owing to entry of private players with innovative products and better sales force.

SBI Life insurance Co Ltd has moved up the rankings to become the leading private insurterms of new business. With the total new business of Rs.7,040 crore in 2009-2010, which increase of 30% over last years premium income, the company has managed to grab a 6share of the life insurance market.

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ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in InBut now it has moved down the rankings 2nd from the leading private insurer in terms of newbusiness. With the total new business of Rs. 6,334.31cr in 2009-2010, which is a 7% decgrowth compared to the business it did in the corresponding period last year.

Bajaj Allianz Life Insurance Co Ltd is the 3rd highest private life insurance company in India.With the total new business of Rs. 4,451.09cr in 2009-2010, which is a 0.90% decline grocompared to the business it did in the corresponding period last year. Bajaj Allianz LInsurance Co Ltd has reported a growth of 52%.

Reliance Insurance Co Ltd has reported growth of 11.57% in 2009-10. Its total new busigenerated is Rs. 3,920.52crore as against Rs. 3,514.06 crore and its market share is 3.59%2009-10. The company is remaining on 4th position in 2009-10 from 2007-08. Reliance Insurance Co Ltd Total collected was Rs 2,792.76 crore in 2007-08 and its market share wento 2.96% from 1.23% a year back.

HDFC Standard Life has established its branches in 110 locations and is targeting non- mtowns. It is hoping to leverage its pedigree/ parentage to gain more customer acceptanceresult, it is focusing on quality not just volume growth. HDFC Standard Life Insurance Cowith an income of Rs 3,261.14 crore in FY2009-10, registering a year-on-year growt23.34%. Its market share is 2.98% and it ranks 6th among the insurance companies andamongst the private players.

Max New York Life Insurance Co Ltd has reported growth of 0.24% in 2009-10 from73%2008-09. Its total new business generated is Rs. 1,848.07cr as against Rs. 1,843.71crore antotal new business generated in 2007-08 was Rs 641.83 crore as against Rs 387.51 crore in 207. Its market share is 2.71% in 2009-10.

Kotak Life Insurance Co Ltd has reported growth of 0.67% decline in 2009-10. Its total business generated is Rs. 1,333.98 crore as against Rs. 1,343.03 crore. Kotak Mahindra

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Mutual Life Insurance Ltd the fiscal 2007-08, the company reported growth of 80%, mofrom the 11th position to 9th.

Birla Sun Life Insurance Co Ltd market share of the company increased from 2.11% to 2.712009-10. The company moved to the 6th position in 2009-10 from 8the a year before, pusdown Max New York Life insurance company.

Max New York Life Insurance Co Ltd has reported growth of 0.24% in 2009-10. Total business generated was Rs 1,848.07 crore as against Rs 647.51 crore. The company was pudown to the 8th position from 7th in 2009-10.

Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2009-10, the company reported grof 0.67%, moving from the 11th position to 10th. It captured a market share of 1.22% in 210. Last year the company doubled its branch network to 150 from 74.Aviva Life Insurance Company India Ltd ranking dropped to 11th in 2009-10 from 9th last yIt has presence in more than 3,000 locations across India via 221 branches and close to 40 assurance partnerships. Aviva Life Insurance plans to increase its capital base by Rs 798crore. With the fresh investment, total paid-up capital of the insurer would go up to Rs 1,3crore.

Source: Economic Times, New Delhi, 22 th Apr 2010

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Insurance in India

The Indian insurance market in spite of having a history covering almost two centuries to

turn after the establishment of the Life insurance Corporation in India in 1956. From beinopen competitive market to being nationalized and then back to a liberalized market againinsurance sector has witnessed all aspects of contest.

A brief History of the Insurance sector

The insurance sector in India has completed all the facets of competition from being an ocompetitive market to being nationalized and then getting back to the form of a liberalmarket once again. The history of the insurance sector in India reveals that it has witnecomplete dynamism for the past two centuries approximately.

With the establishment of the Oriental Life Insurance Company in Kolkata, the businesIndian life insurance started in the year 1818.Important milestones in the Indian life insurance business1912: The Indian Life Assurance Companies Act came into force for regulating the life insurbusiness.

1928: The Indian Insurance Companies Act was enacted for enabling the government to costatistical information on both life and non-life insurance businesses.1938: The earlier legislation consolidated the Insurance Act with the aim of safeguardinginterests of the insuring public.1956: 245 Indian and foreign insurers and provident societies were taken over by the cegovernment and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC 1956. It started off with a capital of Rs. 5 crore and that too from the Government of India.

The history of general insurance business in India can be traced back to Triton InsuraCompany Ltd. (the first general insurance company) which was formed in the year 185Kolkata by the British.Important milestones in the Indian general insurance business1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its tytransact all general insurance business.

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1957: General Insurance Council, an arm of the Insurance Association of India, framed a coconduct for guaranteeing fair conduct and sound business patterns.1968: The Insurance Act improved for regulating investments and set minimal solvency leand the Tariff Advisory Committee was set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the geninsurance business in India. It was with effect from 1st January 1973.107 insurers integrated and grouped into four companys viz. the National Insurance ComLtd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. andUnited India Insurance Company Ltd. GIC was incorporated as a company.

Comparison of Indian Life Insurance Companies

Various Indian life insurance companies

Life Insurance Corporation of India: LIC a term that is almost synonymous with LifeInsurance today. LIC was established in 1956 and till present day is the largest Life Insur

Company in India. LIC enjoyed almost a monopoly status in Life insurance till the last decLIC offers a wide range of Life insurance policies out of which it's most famous is the WLife with Profit Plan. This plan is very flexible starting from the age of 18 till the age of 60can enroll for this policy. This plan also provides the benefit of huge dividends wcomparatively low contributions as premium. The unique feature of this plan is that it can coverage to an individual for his entire life and the age limit of the payment of premiumstretch up to 80 years. But the returns can come in only after the death of the individual.

second popular Life insurance policy is the Anmol Jeevan Regular Premium plan which proa cover of Rs 10, 00,000 for a premium of Rs 3,260 for tenure of 20 years. LIC is India's trusted brand and there is no taking away credit from it no matter how many new privcompanies make their entry into the Insurance Market. LIC has it's loyal who know that itdepend on someone with their hard earned income it is none other than the Life InsuraCorporation of India.

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SBI Life Insurance Company Limited is a joint venture between the State Bank of India andBNP Paribas Assurance. SBI Life extensively leverages the SBI Group as a platform for cselling insurance products along with its numerous banking product packages such as houloans and personal loans. SBIs access to over 100 million accounts across the country provivibrant base for insurance penetration across every region and economic strata in the couensuring true financial inclusion. Agency Channel, comprising of the most productive forcmore than 68,000 Insurance Advisors, offers door to door insurance solutions to customers.

Bharti AXA Life Insurance Company Limited: One of the simplest and yet important plansintroduced by Bharti AXA is known as the Secure Confident Plan. This is a long term insurance plan with riders. The Secure Confident Plan provides coverage of Rs 10, 00,000 a

payment of a premium of Rs 2850 for tenure of 20 years.

Kotak Life Insurance: Kotak Life Insurance is one of India's leading Life InsurancCompanies. It is a joint venture between two corporate giants Kotak Mahindra Bank andMutual Plc, of South Africa one of the leading Insurance companies of the world. Due strong investment pedigree of the Kotak group, Kotak Life insurance can afford to offcomprehensive variety of products and services that best suit the diverse needs and management profiles of the investors with lucrative returns that all investors look for. KotakInsurance offers life insurance plans under two broad categories Traditional Plans and ULinked Plans. The Traditional plan is meant for investors who are totally averse to riwhereby their investments are prevented from being exposed to equities and the ULIP's aname suggest is meant for exposure to equity. This plan is mainly suited for investors wholooking at long term returns.

Max New York Life Insurance: With its vision of being the Most Admired Life Insurance

Company of India Max New York Life Insurance believes in satisfying their customers throquality and business excellence. Along with its umpteen numbers of policies Max New YLife Insurance offers one of the best Life Insurance policies in the country. This Compprovide for both long term and short term life insurance plans. However the best still remaibe the Whole life plan which offers insurance cover till the age of 100. The whole life p

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provides an insurance cover that is guaranteed for life. The policy builds cash and also helpinsured with regular bonuses. The plan also allows one to purchase further bonuses which wpaid along with the Base policy or in the event of an unfortunate demise. This is a dual beplan which provides financial protection plus higher returns.

Hence it would be wrong to say that one company is better than the other because evinsurance company today has something more to offer. They all have their experts who khow to use your hard earned income in the best possible manner so that you can reap thepossible benefits and also add to the goodwill of your insurance company.

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The Insurance Regulatory and Development Authority (IRDA)

The Indian insurance market conventionally focused around life insurance until recentvarious range of other insurance policies covering sectors like medical, automobile, healthother classes falling under general insurance came up, generally provided by the pricompanies. The life insurance of India added 4.1% to the GDP of the economy in 2009immense growth since 1999, when the gates were opened for the private company in the mar

Policy Change in the Indian Insurance market

The Insurance Regulatory Development Act, 1999 (IRDA Act) allowed the entry of pricompanies in the insurance sector, which was so far the sole prerogative of the public seinsurance companies. The act was passed to protect the concerns of holders of insurance pand also to govern and check the growth of the insurance sector. This new act allowed the prinsurance companies to function in India under the following circumstances:

The company should be established and registered under the 1956 company Act. The company should only the serve the purpose of life or general insurance

reinsurance business. The minimum paid up equity capital for serving the purpose of reinsurance business

been decreed at Rs 200 crores. The minimum paid up equity capital for serving the purpose of reinsurance business

been decreed at Rs 100 crores. The average holdings of equity shares by a foreign company or its subsidiaries

nominees should not go above 26% paid up equity capital of the Indian Insurancompany.

Investment policy in the Indian insurance market

IRDA has till now provided registration to 12 private life insurance companies and 9 geninsurance companies. If the existing public sector insurance companies are considered then are presently 13 insurance companies in the life side and 13 companies functioning in gen

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insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsfor underwriting only reinsurance business.The FDI limit in the insurance sector has been capped at 26% for the foreign marketers bugovernment is thinking to increase it to 49% and a bill of this offer is pending at the Rajya SA low cost pension scheme is supposed to be formed by the Pension Fund Regulatory Developmental Authority (PFRDA) on 1st April, 2010 to provide social security to thepoorer class. The compulsory ceding by every General Insurance Corporation (GIC), wouon to stay at 10% under current regulations as specified by IRDA. The average holdingequity shares by a foreign company or its subsidiaries or nominees should not go above paid up equity capital of the Indian Insurance company.

Future of Indian Insurance

Market As per the report of 'Booming Insurance Market in India' (2008-2011), concentratiinsurance markets in many developed countries of the world has made the Indian insurmarket more magnetic in terms of international insurance players. Furthermore, the report

Home insurance sector is likely to achieve a 100% growth since home insuranceare madecompulsory for housing loan approvals by the financial institutions. In the coming three yHealth insurance sector is all set to become the second largest business after motor insuraDuring the period of 2008-09 to 2010-11 the non life insurance premium is likely to hagrowth of 25%.Insurance Companies in India

Registration has been granted to 12 private life insurance companies and 9 general insurcompanies so far by the IRDA. Considering the existing public sector companies in the In

insurance market there are 13 companies functioning in both life and general insurance busrespectively.Some of the major insurance companies in public sector are:

Life Insurance Corporation (LIC) of IndiaNational Insurance Company Limited

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Oriental Insurance LimitedSome of the major insurance companies in Private sector are:

SBI Life ICICI Prudential Bajaj Allianz HDFC Standard Tata AIG Life

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RESEARCH METHODLOGY

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1) Identification of the problem

Since, its inception in 2005, SBI Life insurance with its customized and varied productsnotched higher paces in the ladder in terms of raking in profits. But the fact remains thatmarket share of SBI is still at the medium end From the LIC. Hence, the study addressesproblem of SBIs market share which needs a push and the study will furnish some alternathat SBI can undertake to enhance its image.

2) Determination of information sources

Data was collected via primary source and secondary sources.

The Secondary data was obtained from journals, magazines, newspapers (Economic Times, TTimes of India), and Life insurance books and also from SBI Life insurance company webAnd the information provided by the company which had information of leads about the cumarket position, Growth of the company and market share of the company in the Indinsurance market.

Primary database was developed by conducting a survey via a questionnaire. The judgmenconvenience sampling techniques were used to assess the respondents.

3) Data collection

As mentioned, The Secondary data was obtained from journals, magazines, newspapers(Economic Times, The Times of India), and Life insurance books and also from internet andLife insurance company website. While the primary database was developed via a survey.survey was conducted on the basis of judgment and convenience sampling, and the tapopulation was all the people who held life insurance policies or not.The primary and secondary data were than analyzed using analytical methods to dconclusions viable to the purpose of the project.

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ANALYSIS AND INTERPRETATION

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ANALYSIS AND INTERPRETATION

A sample size of 150 respondents was used for obtaining the information for this study.

THE BREAK UP

The breakup of the respondents is shown as follows on the basis of Age, Sex, Education L

and Occupation:

Following chart depicts the percentage share of male and female respondents. The numbemales was 130 out of the sample size of 150 and the number of females was 20, wh

comprised the target population.

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The breakup of the respondents is shown as follows on the basis of Age, Sex, Education L

and Occupation:

AGE

Up to 25 Yrs. 20%

26-35 41%

36-45 33%

46 and above 6%

As can be seen the relative difference in number of respondents in each of the age group is le

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Up to 25 Yrs.

Analysis of the players in this age group: with respect to holding a policy witcompany.

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26-35Yrs

Comparative analysis of the players in this age group: with respect to holding a policy w

company.

Out of the 41 respondents falling in the above mentioned age group, maximum numberespondents held a policy with LIC, i.e. 33. Among the private players ICICI Prudential leapack with 7 respondents holding a policy with the same, while Bajaj Allianz with 7 responand SBI life Insurance with 2 respondents holding a policy with the company out of a

Interestingly, as the age group narrows down the market share is bent towards the other plaapart from LIC (though LIC still rules the roost). The respondents show faith in emerging prplayers with decrease in age, a fact that will be reiterated with the graph given below for thgroup, 26-35Yrs.

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36-45yrs

Comparative analysis of the players in this age group: with respect to holding a policy w

company.

Out of the 33 respondents falling in the above mentioned age group, maximum numberespondents held a policy with LIC, i.e. 22. Among the private players ICICI Prudential leapack with 5 respondents holding a policy with the same, while Bajaj Allianz with 6 responand SBI Life life Insurance with 1 respondent holding a policy with the company out of aInterestingly, as the age group narrows down the market share is bent towards the other pla

apart from LIC (though LIC still rules the roost). The respondents show faith in emerging prplayers with decrease in age, a fact that will be reiterated with the graph given below for thgroup, 36-45Yrs.

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46 and above

Comparative analysis of the players in this age group: with respect to holding a policy wcompany.

As can be seen, out of the 6 respondents falling in the above mentioned age group,respondents held a policy with LIC, i.e. 6. The respondents show faith towards the LIC, athat will be reiterated with the graph given above for the age group, 46 and above.

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INCOME LEVEL

Less than Rs. 2 lakh 68%

Rs. 2 lakh Rs. 4 lakh 12%

Rs. 4 lakh Rs.6 lakh 14%

Above Rs. 6 lakh 6%

The groups have taken less than 2 lakhs, 2-4 lakh, 4-6 lakh and above 6 lakh.As can be depicted by the graphs the high groups are not vary of investing n other players wthe low income group is more comfortable with one player that it can trust and that has legacHere is where LIC is the front runner and surpasses all the players with a huge margin whiother income groups (higher) we can see a transition which witnesses a decrease in market of LIC and increase in the market share of other players.

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The above graph depicts the percentage share of each income group. Here, Less than 2 groups comprise 58 people, between 2-4 lakh contains 12 people, between 4-6 lakh containpeople and above 6 lakh has 6 people.

Less than Rs. 2 lakh income group


Ascanbeseen

above, the graph depicts that LIC holds a major chunk of the market share with 78 out ofrespondents holding a policy with the company. ICICI holds a meager 13% and Tata Afollows with 6%, while the percentage share of other companies is negligible.

67%

13%

6%

4%4%

6%

Comparative AnalysisLIC ICICI Pru Tata AIG MAX-NYL Bajaj Allianz Kotak Life Insurance

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Rs. 2 Rs. 4 lakh income groups


As inferred,the benttowardsother playersincreases inthis incomegroup. Thatis, withmore moneyin hadrespondents

are not waryin investing the money in emerging players and look for other factors than safety. Hererespondents agreed in having a policy with LIC and 6 agreed with ICICI. SBI Life Insursurfaces in the medium end.

61%

28%

3%

6%2%

Comparative AnalysisLIC ICICI Pru SBI Insurance MAX-NYL Others

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Rs. 4 Rs. 6 lakh income groups


Here 16 respondents agreed in having a policy with LIC and 8 agreed with ICICI. respondents hold multip

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