A PROJECT REPORT ON ANALYSIS OF FINANCIAL STATEMENT OF BIRLA SUNLIFE INSURANCE

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE OF BACHELOR IN BUSINESS ADMINISTRATION

SUBMITTED BY: ABHINAV UPPAL BBA 6TH SEMESTER

SUBMITTED TO: ETI JAIN

BHARATI VIDYAPEETH DEEMED UNIVERSITY SCHOOL OF DISTANCE EDUCATION Academic Study Center - BVIMR, New Delhi An ISO 9001:2008 Certified Institute NAAC Accredited Grade A University

ACKNOWLEDGEMENT

"Accomplishment of any task necessarily depends upon the willingness and enthusiastic contribution of time and energy of many people." From the starting till the completion of this project, there are many people without whose assistance all my efforts would have been fruitless. I, therefore, acknowledge all who generously helped me by sharing their time, experience and knowledge with me without which this project would have never been accomplished. I must express my gratitude to EtI JAIN (my project guide) whose perceptive guidance, constant encouragement, constructive criticism and affection were the light of guidance during my tenure of my work. Finally, I would like to state that the project not only fulfilled an academic requirement, but would also help me in future endeavors in the years to come.

PREFACE
A hallmark of any premier business school is its willingness and ability to constantly explore and implement new ideas and practices in the field of management education. Institute constantly reorients their programs in order to keep abreast of changing development. The initial interaction between school students and industry takes place when the students undergo project is usually for knowing the process for recruitment, selection, industrial relations & training of that institution. It is often the exposure to corporate culture that a student receives, particularly true for students without prior work experience. As a part of curriculum of BBA have joined BIRLA SUNLIFE INSURANCE, New Delhi for summer training & project. BIRLA SUNLIFE INSURANCE is a service oriented Co-operative democratic institution engaged in giving the best in banking services to its customers. During my training at BIRLA SUNLIFE INSURANCE, Head Office I was taken project on marketing & financial services of BIRLA SUNLIFE INSURANCE. The main purpose of the study is to know the policies of the bank regarding marketing & financial services, which helped me in gaining knowledge about the different working pattern of different departments of a bank.

ABHINAV UPPAL

TABLE OF CONTENT PARTICULAR ACKNOWLEDGEMENT PREFACE INTRODUCTION

PAGE NO.

Introductions to insurance industry Profile of the organization Problems of the organization Competition information SWOT analysis of the organization Objective Types of research Methodology Research design Limitations

RESEARCH METHODOLOGY

CONCEPTUAL DISCUSSION DATA ANALYSIS FINDINGS & RECOMMENDATIONS CONCLUSION BIBLIOGRAPHY QUESTIONNAIRE

CHAPTER-1 INTRODUCTION

INTRODUCTION
INTRODUCTIONS TO INSURANCE INDUSTRY:The story of insurance is probably as old as the story of mankind. Tendency of a human being to secure themselves against loss and disaster has been from the starting of world. They sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though

the concept of insurance is largely a development of the recent past, particularly after the industrial era past few centuries yet its beginnings date back almost 6000 years as per records. Functions of insurance: Provide Protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk: Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also. Provide certainty: Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of industries: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance.

Source of earning foreign exchange: Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.

Insurance is divided into two basic zones: General Insurance Life insurance

GENERAL INSURANCE Insurance of the non life assets are called general insurance, this includes loss of asset against water, fire, earthquake etc. With the opening up of the Indian Market in Insurance sector for private players, in General Insurance the monopoly of the general Insurance public sectors companies has been broken. With the entrance of the new private player market innovative technique has been introduced to capture the market. In general Insurance around 17% of the market has been captured by the private players. General Insurance is a sector which alone has many type of insurance coverage in it like Fire Insurance, Marine Insurance, motor Insurance, Liability Insurance, Engineering Insurance etc.

The Non Life Insurers: National Insurance Co. Ltd New Indian Assurance Co. Ltd Oriental Insurance Co. Ltd United India Insurance Co. Ltd Tata AIG General Insurance Co. Ltd Bajaj Allianz General Insurance Co. Ltd IFFCO Tokio General Insurance Co. Ltd BIRLA SUNLIFE INSURANCE Lombard General Insurance Co. Ltd Reliance General Insurance Co. Ltd Royal Sundaram Alliance Insurance Co. Ltd Bharti Axa General Insurance HDFC Chub

ORIGIN Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of time, whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of its happening is not known. So life insurance is known as Life Assurance. The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy. Roles of Life Insurance Life insurance as an investment: Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies.

Life insurance as risk cover: Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide.

Life insurance as tax planning: Insurance serves as an excellent tax saving mechanism too.

Importance of Life Insurance Protection against untimely death: Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. Saving for old age: After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. Promotion of savings: Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only after the expiry of duration of the policy. Initiates investments: Life Insurance Corporation encourages and mobilizes the public savings and channelizes the same in various investments for the economic development of the country. Life insurance is an important tool for the mobilization and investment of small savings. Credit worthiness: Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business. Social Security: Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future.

Balance sheet
(Rs crore) Mar ' 12 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & 1,199.20 738.24 1,092.60 722.84 870.69 597.01 708.33 547.05 737.06 788.49 2,201.11 7.79 848.58 1,344.75 509.62 1,044.81 1,751.32 7.79 775.91 967.62 488.94 1,169.21 1,430.02 8.00 731.33 690.68 327.77 1,141.65 1,354.20 8.22 694.15 651.82 141.86 552.29 1,173.44 8.44 672.64 492.36 149.11 634.00 922.62 201.71 3,360.14 770.64 174.77 2,995.54 518.20 132.36 2,433.78 219.40 8.36 1,507.25 206.01 21.49 1,224.04 77.01 2,158.80 77.01 1,973.12 77.01 1,706.21 77.01 1,202.48 77.01 919.53 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

10

Mar ' 12 provisions Total net current assets Miscellaneous expenses not written Total Notes: Book value of unquoted investments Market value of quoted investments Contingent liabilities Number of equity sharesoutstanding (Lacs) 460.96

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

369.76

273.68

161.28

-51.44

3,360.14

2,995.54

2,433.78

1,507.25

1,224.04

294.26

424.05

775.03

462.06

618.82

755.73 243.51

790.48 392.50

448.95 331.60

117.81 237.54

136.94 92.46

770.05

770.05

770.05

770.05

770.05

11

Profit loss account

(Rs crore) Mar ' 12 Income Operating income Expenses Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Cost of sales Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments 681.53 610.28 213.80 350.03 71.39 -56.01 1,871.02 418.43 94.45 512.89 108.09 80.00 324.80 106.84 217.95 13.97 7.28 598.60 541.21 174.26 326.80 66.58 -9.32 1,698.13 448.23 97.97 546.20 61.95 64.83 419.41 117.78 301.63 13.83 4.42 473.74 469.18 146.27 288.40 65.72 1,443.31 721.13 73.23 794.36 26.97 55.64 711.75 203.63 508.12 35.33 13.73 455.51 432.74 148.59 258.54 61.84 1,357.23 445.59 26.03 471.61 22.05 43.42 406.15 112.95 293.19 24.51 5.81 314.69 421.33 141.45 214.53 57.07 1,149.07 575.84 27.98 603.81 21.05 41.44 541.32 157.61 383.71 6.05 3.81 2,289.46 2,146.37 2,164.44 1,802.82 1,724.91 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

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Mar ' 12 Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 239.21 429.71 46.20 7.50 376.01

Mar ' 11 319.88 510.77 46.20 7.57 457.00

Mar ' 10 557.18 658.10 46.20 7.75 604.15

Mar ' 09 323.51 491.46 34.65 5.89 450.92

Mar ' 08 393.57 553.99 30.80 5.23 517.95

Ratios
(Rs crore) Mar ' 12 Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) 28.30 38.69 31.06 41.45 6.00 54.34 39.17 47.59 41.54 49.96 6.00 58.21 65.98 73.21 72.36 79.58 6.00 93.65 38.07 43.71 42.01 47.65 4.50 57.86 49.83 55.21 51.11 56.49 4.00 74.78 Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08

Book value (excl rev res) per share EPS (Rs) 290.34 Book value (incl rev res) per share EPS (Rs) 291.36 Net operating income per share EPS (Rs) 297.31 Free reserves per share EPS (Rs) 273.94

266.23

231.57

166.16

129.41

267.24

232.61

167.22

130.51

278.73

281.08

234.12

224.00

252.00

219.58

155.95

119.21

13

Mar ' 12 Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) 18.27 14.78 10.03 12.49

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

20.88 17.86 14.25 16.32

33.31 30.74 24.90 25.19

24.71 22.30 17.68 18.40

33.38 30.98 22.45 24.25

Adjusted return on net worth (%) 9.74 Reported return on net worth (%) 10.69 Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity 0.33 0.50 14.48

14.71

28.49

22.91

38.50

15.60 18.08

31.24 33.66

25.28 30.24

39.49 51.08

0.29 0.46

0.23 0.36

0.10 0.17

0.10 0.22

Owners fund as % of total source 66.53 Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend profit) payout ratio (net 22.44 1.62 0.93 0.99 19.77 0.71

68.43 1.23

73.26 1.51

84.88 1.33

81.41 1.47

1.51 0.89 0.96 15.87

1.46 0.92 0.93 18.37

1.29 0.97 0.89 26.19

0.93 0.72 0.65 20.17

16.81

9.68

12.53

9.15

14

Mar ' 12 Dividend payout ratio (cash profit) 16.82 Earning retention ratio Cash earnings retention ratio Coverage ratios Adjusted cash flow time total debt 3.77 Financial ratio charges coverage 4.75 75.37 81.98

Mar ' 11

Mar ' 10

Mar ' 09

Mar ' 08

13.97 82.18 85.33

8.80 89.39 90.44

11.04 86.18 87.96

8.28 90.61 91.53

2.58

1.15

0.67

0.53

8.82 7.21

29.45 23.72

21.39 17.64

28.68 21.66

Fin. charges cov.ratio (post tax) 3.95 Component ratios Material cost component (% earnings) 28.00 Selling cost Component 15.28

29.56 15.22 4.63

23.47 13.32 3.28

24.41 14.34 5.01

19.95 12.43 4.06

Exports as percent of total sales 3.36 Import comp. in raw mat. consumed 8.47 Long term assets / total Assets 0.70

15.83 0.70

33.31 0.71

5.34 0.65

23.44 0.63

Bonus component in equity capital (%) 35.90

35.90

35.90

35.90

35.90

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INDIAN INSURANCE INDUSTRY HISTORY:

Life insurance came to India from England in 1818 when oriental life insurance company started in Calcutta by Europeans. After this many insurance companies had been started in India. But these companies were looking after only the needs of European community established in India. Indian people were not being insured by these companies. First Indian life insurance company came as Bombay mutual life insurance assurance. Second company was Bharat insurance company came in 1896. After this the united India in Madras, national Indian and national insurance in Calcutta and the co-operative assurance in Lahore were established in 1906. To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and provident fund act. These acts consist of premium rates tables and periodical valuations of companies. In the first two decade of 20th century many life insurance companies were started. So the insurance act came in 1938 to governing life and non life insurance companies and to provide strict state control. In 1956 the life insurance business in India was nationalized. In 1956 life insurance corporation of India (LIC) was created to spreading life insurance much more widely particularly in rural areas. In that year LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured of 200crores, 1000crores in 1970, and 7000crores in 1986. INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY: In 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders interests.

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Powers and Functions a) It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations. b) It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract. c) It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business. d) One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re-insurance business is also a major duty of IRDA. e) IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries and other organizations related to the insurance sector. f) It is also concerned with the regulation of the rates, profits, provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee. g) It is also entitled to supervise the functioning of the Tariff Advisory Committee. IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators . h) It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency Role of IRDA: Protecting the interests of policyholders. Establishing guidelines for the operations of insurers and brokers.

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Specifying the code of conduct, qualifications and training for insurance intermediaries and agents. Promoting efficiency in the conduct of insurance business. Regulating the investment of funds by insurance companies. Specifying the percentage of business to be written by insurers in rural sectors. Handling disputes between insurers and insurance intermediaries.

Changing perception of Indian customers: Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers. For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a Take-it-As-it-basis. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers. Indian customers have become very sensitive to Coverage / Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP Product / Group Life and Credit Life in Life Insurance segment and Travel / Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being demanded by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic days customers looking at insurance products as a life cover which can

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provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So todays customers wants good return from the insurance companies. The Indian customers forms the pivot of each companys strategy. Investment of Indian household savings (as a % in different sector) BANK DEPOSITS CORP. BANKS SHARES AND DEBENTURES MUTUAL FUNDS NBFCS GOVT. BONDS INSURANCE PF/ RETIRE FUNDS CURRENCY 39 2 1 2 3 13 13 21 6 Source: www.avivaindia.com

Changing face of Indian insurance industry: After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. Today life-insurance is not only limited up to just life risk cover and maturity period bonuses but changed to greater return from the investments. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments like shares, bonds, debentures, government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30-40% average growth per annum. These lifeinsurance companies have every kind of policies suiting every need right from financial needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of life, pension solutions after retirement. These companies have every aspects and needs of our life covered along with the deathbenefit. In India only 25% of the population has life insurance. So Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major

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Indian companies with other International insurance companies to start up their business. The government of India has set up rules that no foreign insurance company can set up their business individually here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment. Indian insurance industry can be featured by: Low market penetration. Ever growing middle class component in population. Growth of customers interest with an increasing demand for better insurance products. Application of information technology for business. Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has more than a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. The success of their effort is that they have captured over 28% of premium income in five years. The biggest beneficiary of the competition among life insurers has been the customer. A wide range of products, customer focused service and professional advice has become the mainstay of the industry, and the Indian customers forms the pivot of each companys strategy. Penetration of life insurance is beginning to cut across socio-economic classes and attract people who have never purchased insurance before. Life insurance is also now being regarded as a versatile financial planning tool. Apart from the traditional term and saving insurance policies, industry has seen the entry and growth of unit linked products. This provides market linked returns and is among the most flexible policies available today for investment. Now products are priced, flexible, and realistic and sustain so people in better position to understand the risk and benefits of the product and they are accepting these innovative products. So it is clear that the face of life insurance in India is changing, but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Whatever the developments, the future and

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the opportunities in this industry will surely be exciting. The number of companies in Insurance particularly in Life Insurance has changed drastically now the number is in 17. List of them are mentioned as below : 1. BIRLA SUNLIFE INSURANCE Prudential Life Insurance 2. TATA AIG Life Insurance 3. Max New York Life Insurance 4. AVIVA Life Insurance 5. Bharti AXA Life Insurance 6. Kotak Life Insurance 7. Reliance Life Insurance 8. SBI Life Insurance 9. HDFC Standard Life Insurance 10. Birla Sun Life Insurance 11. Sahara Life Insurance

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COMPANY PROFILE
Birla SunLife Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business. Birla SunLife Insuranceis the first life insurance company in India to be awarded the IS0 9001:2000 certification. Birla SunLife Insurancewas among the top 25 companies to work with in India, according to 2003 Business World magazine, "Great Workplaces In India", Birla SunLife Insurancewas ranked at the 20th position. This survey is the local version of the "Great Places To Work" survey carried out every year in 22 countries. It is among top five most respected private life insurance companies in India according to a 2004 Business World survey. Financial Strength In line with its values of financial responsibility, Birla SunLife Insurancehas adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital is Rs. 587 crore, which is more than the norm laid down by IRDA. Type of Products Offered Birla SunLife Insuranceoffers a suite of flexible products. It now has 22 life insurance products and 8 riders that can be customised to over 400 combinations enabling customers to choose the policy that best fits their need. The basic categories are:

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RECENT ACHIEVEMENTS
Year 2011 Awarded From Golden Peacock Global Awards Secretariat Internet Advertising Competition (IAC)Awards 2011 Advertising Agencies 2011 Association of India & Advertising Club Bombay Advertising Agencies 2011 Association of India & Advertising Club Bombay Advertising Agencies 2011 Association of India & Advertising Club Bombay BBC.com-Campaign India 2011 Digital Media Awards 2011 APPIES 2010 - Asia 2010 Pacific Advertising & Marketing Congress 14th Annual Webby Awards 2010 Institute of Chartered Accountants of India (ICAI) Vision To become the most admired life insurance Company in India. Golden Peacock Award Best Insurance Integrated ad campaign (NotJobsButPassion campaign) Bronze - Media Abby Awards at Goa Fest 2011 as Best Never Before use of Media Gold - Creative Abby Awards at Goa Fest 2011 as Direct marketing Dimensional Mail Best use of Outdoor & Ambient media Awards at Goa Fest 2011 - Direct marketing Flat Mail Gold - "financial services website" category for Birla Sun Life Insurance - NotJobsButPassion microsite Silver Medal & a letter of appreciation for - Wealth with Protection Solutions campaign Official Nominee - BSLI Email marketing campaign 'Save Forest' ICAI Awards for Excellence in Financial Reporting Silver in Insurance Category Title

2011

2010

2009

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Values This vision to become India's most admired life insurance company will be realized through its unique set of values, which are as follows: Knowledge Knowledge leads to expertise; and BIRLA SUNLIFE INSURANCE expertise is in helping people protect themselves. Perfectly combining global expertise with local knowledge, it is India's life insurance specialist. Birla SunLife Insurancebelieves that for knowledge to be of value it must be focused, current, tested and shared. Caring Birla SunLife Insuranceis redefining the life insurance paradigm by focusing on customers first. The service process is responsive, personalized, humane and empathetic. Every individual who represents the company is for us BIRLA SUNLIFE INSURANCE brand champion. Honesty Honesty is the heart of the life insurance business. It is all about trust. Transparency, integrity and dependability form the cornerstones of the Birla SunLife Insuranceexperience. The company ensures that everyone who represents the brand carries a promise : we care in word as well as deed. Excellence Excellence at Birla SunLife Insuranceimplies the ability to perform at a consistently high level. Focused on the value of continuous improvement in people, processes and the organization, the company strives for the highest standards of quality in every aspect of its business. Mission Become one of the top quartile life insurance companies in India Be a national player

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 Be the brand of first choice Be the employer of choice Become principal of choice for agents PRODUCTS Individual Insurance Whole Life Participating Policy Whole Life Participating Policy provides an insurance cover that is guaranteed for your entire life. This policy also builds cash value, which you can use during your lifetime to fund any unforeseen needs either by surrendering accumulated PUAs (explained below) or taking a loan. In addition this policy is also eligible for bonuses. KEY BENEFITS On death of life insured: Sum Assured plus accrued bonuses On Maturity (attaining age 100): Sum Assured plus accrued bonuses Bonus: From 3rd policy year, we will declare bonuses every year Tax benefits: You are entitled to the following tax benefits under Income Tax Act 1961 Your premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year. Your DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10,000/- every year. Your claim amounts (from death, through surrenders or on maturity) are eligible for tax exemption u/s 10(10D). We offer you the flexibility to enhance the value of your policy by using the following riders/options: 1. Option to Participate in Progressive Bonuses: Allows you to top up your premiums to purchase additional Sum Assured in your existing policy. It also generates further bonuses. 25

2. Dread Disease (DD) Rider: Pays a lump sum amount in case you contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. 3. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. 4. Term / Term R&C Riders: Offers additional Sum Assured to match your changing needs. The R&C also allows you the freedom to buy a fresh insurance plan later in your life. 5. Waiver of Premium (WOP) / Payor Riders: Waives your future premiums in case you suffer total disability. The payor rider waives future premiums on your childs policy in case you suffer total disability 6. Guaranteed Insurability Option (GIO) Rider: Allows you to buy guaranteed additional insurance at seven different stages in your life. Life Partner Plus Life Partner PlusTM Plan offers you powerful triple benefits of Money if you live i.e. maturity benefit at age 75 Money if you don't i.e. a Life Insurance coverage till age 75 Money backs i.e. a part of the Sum Assured at regular intervals to take care of your periodic foreseen needs. KEY BENEFITS 1. On death of life insured: Initial Sum Assured Plus Sum Assured of Paid Up Additions through bonuses 2. On survival: Money backs @ 7.5% of the Initial Sum Assured will be paid on each policy anniversary from age 61 to 75. 3. On maturity: 100% of Sum Assured with Sum Assured of Paid Up Additions, if any. 4. On Surrender of Policy: Surrender value. 5. Limited Premium Payment term: You can choose to pay the premiums over 4 terms i.e. 3 years, 7 years, 10 years or 20 years. 6. Bonus: From 3rd policy year, we will declare bonuses every year. 7. Tax benefits: 26

You are entitled to the following tax benefits under Income Tax Act 1961: 1. Your premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year. 2. Your DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10,000/- every year. 3. Your claim amounts (from death, on maturity, or Money Backs or through surrenders) are eligible for tax exemption u/s 10(10D). Life Protector Plus Life Protector Plus provides you with a low cost insurance cover during its tenure of 5 years. It is also convertible any time into any permanent life insurance policy from BIRLA SUNLIFE INSURANCE, so that you are able to take advantage of increasing your savings when your responsibilities increase viz. on marriage, or on child birth. KEY BENEFITS On death of life insured: Sum Assured. Tax benefits: You are entitled to the following tax benefits under Income Tax Act 1961 Your premiums are eligible for deduction u/s 80C up to Rs.100,000/- every year. Your DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10,000/- every year. Your claim amount (from death) is eligible for tax exemption u/s 10(10D).

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Customize your policy to meet your specific needs: We offer you the flexibility to enhance the value of your policy by using the following riders/options Dread Disease (DD) Rider: Pays a lump sum amount in case you contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Life Partner PlusTM Plan Life Partner PlusTM Plan offers you powerful triple benefits of Money if you live i.e. maturity benefit at age 75 Money if you don't i.e. a Life Insurance coverage till age 75 Money Backs i.e. a part of the Sum Assured at regular intervals to take care of your periodic foreseen needs. KEY BENEFITS 1. On death of life insured: Initial Sum Assured Plus Sum Assured of Paid Up Additions through bonuses 2. On survival: Money backs @ 7.5% of the Initial Sum Assured will be paid on each policy anniversary from age 61 to 75. 3. On maturity: 100% of Sum Assured with Sum Assured of Paid Up Additions, if any. 4. On Surrender of Policy: Surrender value. 5. Limited Premium Payment term: You can choose to pay the premiums over 4 terms i.e. 3 years, 7 years, 10 years or 20 years. 6. Bonus: From 3rd policy year, we will declare bonuses every year. 7. Tax benefits: You are entitled to the following tax benefits under Income Tax Act 1961:

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 Your premiums are eligible for deduction u/s 80C up to Rs.100,000/every year. Your DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10,000/- every year. Your claim amounts (from death, on maturity, or Money Backs or through surrenders) are eligible for tax exemption u/s 10(10D). Customize your policy to meet your specific needs: We offer you the flexibility to enhance the value of your policy by using the following riders/options: Dread Disease (DD) Rider: Pays a lump sum amount in case you contract any of the ten diseases covered e.g. Heart Attack, Cancer, etc. Personal Accident Benefit (PAB) Rider: Pays additional insurance coverage in case of death or disability caused by an accident. Term / Term R&C Riders: Offers additional Sum Assured to match your changing needs. The R&C also allows you the freedom to buy a fresh insurance plan later in your life. Waiver of Premium (WOP) / Pay or Riders: Waives your future premiums in case you suffer total disability. The pay or rider waives future premiums on your childs policy in case you suffer total disability. Group policy Group Term Insurance Group Term Insurance is the mainstay of our employee benefit platform. Here are some of the key features and benefits: Group Term Life - Key features and Benefits Easy and convenient administration one single master policy for all employees. Group size of at least 25 employees.

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 No upper limit on membership. Policy is valid for one year and can be renewed annually. Uniform or a graded cover can be provided on any basis chosen by your subject to a maximum of three years of salary per employee. In case of death of an employee, due to natural or accidental reasons, the entire sum assured amount is paid to the employer. Additional Protection is available through riders for Critical Illness, Accidental Death Benefits, Disability and Dismemberment. New members can join and out going members can leave the scheme at any time with premium adjustment. Group Term Insurance Scheme Overview of EDLI Scheme, 1976 All establishments with at least 10 full-time permanent employees and to whom the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 applies, have a statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme (EDLI), 1976 to provide for life insurance for all their employees. The organization has to make a contribution @ 0.51% of each employee's wages (Basic + Dearness Allowance + Retaining Allowance), subject to a maximum of Rs.6,500 per month, to the Provident Fund Authorities as part of its compliance to the Act. The death benefit payable under this scheme is based on the provident fund account balance of the individual member, subject to a maximum of Rs.60,000. A solution which is simple, flexible and unique Under Section 17 (2-A) of the Provident Fund Act, the Central Provident Fund Commissioner may, if requested to do so by the employer, by notification in the Official Gazette, exempt, whether prospectively or retrospectively, any establishment from the provisions of the EDLI scheme, if he is satisfied that the employees of such establishment, without making any separate contribution or payment of premium, enjoy life insurance benefits more favourable than the benefits under the EDLI scheme.

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Birla SunLife Insurance Co. Ltd offers Group Term Insurance Scheme, a unique, simple and flexible scheme, that is a far better alternative to the Employee Deposit Linked Insurance Scheme (EDLI) because of the benefits it offers to both the employer and the employee. The Employees Provident Fund Organisation has approved this scheme as an alternative to EDLI scheme. The organization will enjoy the following advantages by subscribing to the Birla SunLife Insurance Group Term Insurance as compared to the EDLI scheme: The premium payable by the employer under the Birla SunLife Insurance Group Term Insurance Scheme will be usually less than the total contribution being paid by the employer to Regional Provident Fund Commissioner, particularly when average age of the group is low and the employer is in a low-risk industry. Flexibility to opt for either a uniform flat cover for all employees or a graded cover as per notional PF balance. Well defined and simplified claim process will ensure quicker and hassle-free claim settlement. Administrative convenience for additions and deletions of members with no elaborate paperwork. Credit Shield is a protection cover, which ensures that the loan amount is paid back to the lender in case of an untimely demise of the borrower. Convenient Structuring The plan can be conveniently structured in a way such that the entire loan amount or the balance loan amount is paid up in case of the untimely demise of the borrower. The premiums can also be adjusted every year according to the reducing loan balance amount. This plan provides total peace of mind because in case of an untimely demise of the borrower, the family is not burdened with the loan.

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After an employee has rendered continuous service for at least five years, he/ she is eligible for 15 of days pay for each completed year of service. The employer can also structure a gratuity benefit that is higher than statutory requirements. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination etc), by taking last drawn basic salary as the basis for the calculation. Gratuity payment is a statutory liability for an organization and tends to increase as the salaries and tenure of employment increase annually. In case of big, developing & growing organization, gratuity payout can work out to a substantial amount. If the employer pays gratuity from its current revenue, it may become difficult to meet the liability, it is therefore prudent and also beneficial that a gratuity fund is set up. Benefits of the Group Gratuity Plan Investment management in a conservative manner to ensure steady appreciation in fund income. Employees can be insured for the future service gratuity for full-anticipated service. Scientific funding of gratuity on actuarial valuation and hence superior planning for gratuity payments. Past gratuity liability contribution can be made in installments. Contributions are exempt under income tax act. Benefits to the members Birla SunLife Insurance will provide statement of account every quarter. Free Actuarial Valuation for future gratuity liability. For a new fund Birla SunLife Insurance can assist in formation of the Trust and its documentation. An existing Gratuity Fund can be taken over by BIRLA SUNLIFE INSURANCE and we will offer assistance in documentation like Deed of variation to the original Trust Deed etc.

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Basic Guidelines for Birla SunLife Insurance Group Gratuity Scheme 1. Eligibility: All employees (members) above the age of 18 are eligible for this plan. Existing fund approved by the Income Tax Commissioner should be administered through Trustees under a Trust. 2. Contribution: The Trust will make the contribution to the fund. Contribution can be made quarterly, half-yearly or yearly. 3. Surrender Fee: In case a Policyholder wants to surrender the policy, a surrender fee is applicable. This fee is based on the realizable market value of the assets and depending upon the duration of the association with Max New York Life. Term Insurance Cover Term insurance cover equal to future service gratuity Premium for term insurance cover will be computed separately. The insurance cover will also form part of Group Gratuity policy. Insurance cover will be paid only on the death of the member. Gratuity is a statutory benefit to the employees under the Payment of Gratuity Act 1972. After the employee has rendered continuous service for at least five years, he/ she is eligible for 15 days pay for each completed year of service. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination etc), by taking last drawn basic salary as the basis for the calculation. Gratuity payment is a statutory liability for an organization and tends to increase as the salaries and tenure of employment increase annually. In case of big, developing & growing organization, gratuity payout can work out to a substantial amount. If the trust pays gratuity from its current revenue, it becomes difficult to meet the liability, it is therefore beneficial that a gratuity fund is set up for prudent financial planning. Apart from being used as an effective tool to reward loyal employees, Gratuity can be considered as a powerful tool to retain employees as well. This can be done by structuring a higher gratuity benefit than the statutory requirements. Birla SunLife Insurancehas made the Group Insurance portfolio more robust by launching the Unit Linked Gratuity Plan.

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Max New York can now offer you two options of: 1. Non unit Linked or Traditional Group Gratuity Plan: which facilitates systematic and steady funding of the liability 2. Unit Linked Group Gratuity Plan: which facilitates steady funding and the opportunity of Increased returns on investment. Benefits of the Unit Linked Group Gratuity Plan Opportunity for growing the fund safely and prudently by managing the fund investments properly and maximizing the returns on the investments and thereby bringing down the costs of the funding liability in the future. Multiple Flexible Investment options based on the risk taking ability of the trust. Lives cover for full-anticipated service. Contributions are exempted from Tax. Total Transparency in charges and the returns declared. Complete range of services provided: Taxation, Legal, Investment . Product Features Eligibility Employer-Employee Groups Group Size of 25 members or more Employees between age 18 and retirement age of the company Contributions BIRLA SUNLIFE INSURANCE will open and manage a Unit Account for the Trustees in which units are allocated and cancelled for the purpose of paying Gratuity The trust also pays a premium for the life insurance cover. This cover could be either the future service liability or a uniform/graded cover

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On receiving a claim, BIRLA SUNLIFE INSURANCE will redeem the units in the investment fund and pay the gratuity benefit In case of death of an insured member, BIRLA SUNLIFE INSURANCE will also pay the sum assured applicable for that member in addition to the gratuity benefit Contributions to be made towards the Gratuity Liability by the Trust to BIRLA SUNLIFE INSURANCE would be as per Actuarial Valuation Post AS-15 certification Past Service Gratuity Liability payment can be made over a period of 5 years The annual contributions can be made annually/half yearly/quarterly/monthly Redirection Annual contributions can be invested as per new fund break-up, not adhering to the initial investment break-up. This gives more flexibility for better financial planning as per specific requirements. Charge Structure BIRLA SUNLIFE INSURANCE unit linked Gratuity has one of the most transparent charge structures in the market currently. The Fund Management charge is also extremely competitive. Fund Management Charges - The fund management charge is levied as a percentage of value of assets and shall be appropriated by adjusting the Net Assets Value. Switching: BIRLA SUNLIFE INSURANCE UL Group Gratuity plan offers its clients a flexibility to switch funds from exiting fund to any other fund options, as per trust rules. Two free switches in one policy year can be availed by the clients. Surrender Fee: is applicable if a policyholder wants to surrender the policy. This fee is based on the length of association with Max New York Life.

Fund options BIRLA SUNLIFE INSURANCE Group Gratuity plan is a market linked investment product, which offers 3 fund options to choose from. Fund Options Fund Type Description Asset Types Conservative Fund (%) 35 Balanced Fund (%) Growth Fund (%)

Govt. Securities

50-80 20-50 0-30 20-40 0-30 0-20 0-20 0-20

Corporate Bonds (Investment Grade) 0-50 Cash/Call Money Markets Equities Nil 10-40 20-60

The BIRLA SUNLIFE INSURANCE Advantage Fund Management Philosophy Total Transparency in charges, returns declared and the portfolio of investments. Flexibility in premium payments, redirection of premiums, term cover. Superior Service ISO certified Operations & Processes Free and diversified services: legal, investment, taxation Dedicated Relationship Manager Effective Transaction Processing & Superior Turnaround Times Robust Data Management With High Confidentiality Maintained Most Transparent charges and Low Fund Management Charges Saving Life Pay Money Back Plan (Participating) Policy Life Pay Money Back Plan (Participating) Policy will keep paying you a part of the Sum Assured at regular intervals, to take care of your periodic foreseen needs, and the balance keeps growing to take care of your long term saving needs, as well as provides insurance coverage till maturity. In addition this policy is also eligible for bonuses.

KEY BENEFITS 1. On death of life insured: Sum Assured plus Sum Assured of Paid Up Additions (without deducting any money back installments, if already paid).

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2. 3. 4.

On maturity: Sum Assured less money backs already paid plus 10% of SA as guaranteed addition plus accrued bonuses. Bonus: From 3rd policy year, we will declare bonuses every year. Tax benefits: You are entitled to the following tax benefits under Income Tax Act 1961: Your premiums are eligible for deduction u/s 80C up to Rs.100,000/every year. Your DD rider premiums are eligible for an additional deduction u/s 80D up to Rs.10,000/- every year. Your claim amounts (from death, thorugh surrenders or on maturity) are eligible for tax exemption u/s 10(10D).

Competitors:
ICICI Prudential Life Insurance Company ICICI Insurance has two faces

ICICI Prudential Life Insurance Companyand ICICI Lombard General Insurance Company Limited. ICICI PrudentialLife Insurance is a 74:26 joint venture between ICICI Bank India Ltd. andPrudential PLC based in UK. Established in 2000, today ICICI Prudential h a s 7 3 5 o f f i c e s , 2 2 B a n c a s s u r a n c e p a r t n e r s a n d o v e r 2 . 4 l a k h a d v i s o r s . Having won public accolade as the most trusted private life insurer in India,ICICI Prudential Life Insurance Co Ltd brings a wide array of life insurance products to the customers.In addition to these insurance policies, ICICI Prudential bring to you easy p r e m i u m payment solutions by cheque or cash at t h e b r a n c h e s , c h e q u e payments at the drop boxes, ECS, credit card payment and online payment.

3.MAX NEW YORK LIFE INSURANCE:-

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Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one of India's reputable multi-business corporations and New York Life International, the foreign arm of New York Life. Max New York Life Insurance has commenced its commercial operation in April 2001. Since then, it is adopting prudent financial practices to offer complete safety to policyholder's funds.The company enjoys multi-channel distribution spread throughout the nation. Max New York Life has put in place a unique hub-and-spoke model of distribution to ensure deep rural penetration. Unexpected events hit without any pre-warning, and therefore, can disrupt the free flow of life. Therefore, it is necessary, to be ready at all times

4. Tata AIG Life Insurance Company Limited:-

Incorporated in February, 2001 Tata AIG is the joint venture between Tata Group multi business conglomerate and AIA- Asian unit of American International Group (AIG), US based insurance organization. Tata Sons holds a majority stake 74% and AIA holds 26% equity in the joint venture.

5. AVIVA INDIA LIFE INSURANCE

Aviva India is a joint venture between one of the countrys oldest and largest groups, Dabur, and Aviva plc, the UK's largest insurance group, whose association with India dates back to 1834.Our vision is to be amongst Indias leading life insurers with a quality business model, focused on sustainable growth. Itseeks to build a robust product portfolio meeting all customer lifecycle needs related to Savings, Retirement, Investments and Protection. With a strong sales force of over 20,000 Financial Planning Advisers (FPAs), they have initiated and pioneered many innovative sales approaches, including the concept of Banc assurance and Financial Health Check services. they are among the first companies to introduce the contemporary unit-linked products. With a wide distribution network of 140 branches and strong Banc assurance partnerships are spread across nearly 3,000 towns and cities in India.

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SWOT ANALYSIS

SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position of the business and its environment. Its key purpose is to identify the strategies that will create a firm specific business model that will best align an organizations resources and capabilities to the requirements of the environment in which the firm operates. In other words, it is the foundation for evaluating the internal potential and limitations and the probable/likely opportunities and threats from the external environment. It views all positive and negative factors inside and outside the firm that affect the success. A consistent study of the environment in which the firm operates helps in forecasting/predicting the changing trends and also helps in including them in the decision-making process of the organization. An overview of the four factors (Strengths, Weaknesses, Opportunities and Threats) is given belowStrengths- Strengths are the qualities that enable us to accomplish the organizations mission. These are the basis on which continued success can be made and continued/sustained. Strengths can be either tangible or intangible. These are what you are well-versed in or what you have expertise in, the traits and qualities your employees possess (individually and as a team) and the distinct features that give your 39

organization its consistency. Strengths are the beneficial aspects of the organization or the capabilities of an organization, which includes human competencies, process capabilities, financial resources, products and services, customer goodwill and brand loyalty. Examples of organizational strengths are huge financial resources, broad product line, no debt, committed employees, etc. Weaknesses- Weaknesses are the qualities that prevent us from accomplishing our mission and achieving our full potential. These weaknesses deteriorate influences on the organizational success and growth. Weaknesses are the factors which do not meet the standards we feel they should meet. Weaknesses in an organization may be depreciating machinery, insufficient research and development facilities, narrow product range, poor decision-making, etc. Weaknesses are controllable. They must be minimized and eliminated. For instance - to overcome obsolete machinery, new machinery can be purchased. Other examples of organizational weaknesses are huge debts, high employee turnover, complex decision making process, narrow product range, large wastage of raw materials, etc. Opportunities- Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable. Organizations can gain competitive advantage by making use of opportunities. Organization should be careful and recognize the opportunities and grasp them whenever they arise. Selecting the targets that will best serve the clients while getting desired results is a difficult task. Opportunities may arise from market, competition, industry/government and technology. Increasing demand for telecommunications accompanied by deregulation is a great opportunity for new firms to enter telecom sector and compete with existing firms for revenue. Threats- Threats arise when conditions in external environment jeopardize the reliability and profitability of the organizations business. They compound the vulnerability when they relate to the weaknesses. Threats are uncontrollable. When a threat comes, the stability and survival can be at stake. Examples of threats are unrest among employees; ever changing technology; increasing competition leading to excess capacity, price wars and reducing industry profits; etc.

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Organisational Structure

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OUR PEOPLE
Management Team

Mr. Jayant Dua MD & CEO Mr. Jayant Dua is the Managing Director and Chief Executive Officer at Birla Sun Life Insurance. He is a Chemical Engineer from IIT Delhi and an MBA. He also holds an Advanced Management Program (AMP) from Harvard Business School, USA. He joined Birla Sun Life Insurance in July 2010.

Mr. Mayank Bathwal

CFO & Head of Institutional Sales

Mr. Amitabh Verma

Chief Operating Officer

Mr. Sashi Krishnan

Chief Investment Officer

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Mr. Arun Malkani

Chief Marketing Officer

Mr.Pramod Krishnamurthy
Head Information Technology

Mr. Saurov Ghosh

Head Human Resources & Training

Mr. Lalit Vermani

Head Compliance, Risk, Legal & Audit

Mr. Vikas Seth

Head of Sales DSF

Mr. Anil Singh

Chief Actuarial Officer

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MARKETING STRATEGY OF BIRLA SUNLIFE INSURANCE

Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered around the key concept that customer satisfaction is the main goal. Marketing strategy is a method of focusing an organization's energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm's marketing goals, and explains how they will be achieved, ideally within a stated timeframe. Marketing strategy determines the choice of target market segments, positioning, marketing mix, and allocation of resources. It is most effective when it is an integral component of overall firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement All four elements of the Marketing mix are closely related in formulating the Marketing strategy. Marketing planning involves establishing objectives for marketing activity, determining and scheduling the steps necessary to achieve the objectives, and then allocating the necessary resources. Marketing strategy includes the activities of finding a competitive advantage, planning for the companys growth, analyzing the companys portfolio and allocating the companys resources. Marketing control involves a careful monitoring of the results of the Marketing plan to ensure that the plan is achieving the objectives that were set and that it is costeffective. Facts of Marketing These are diverse facts of Marketing, but the tasks of Marketing remain the same: to understand the customer, know who is involved in making a purchase decision, and then develop a Marketing mix- product, price, distribution system, and communication- that will satisfy those customers.

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MARKETING STRATEGY OPT BY BIRLA SUNLIFE INSURANCE Direct marketing addresses some of the biggest challenges in marketing a business lead generation, converting those leads into high quality customers, and then systematically growing customer profitability. Direct marketing helps the company to get through the marketing noise, and delivers a high return on investment for your marketing spend. With prospects being presented with so many choices, they seldom, if ever, buy at the first contact. In fact, it can take anything from 9 to 15 contacts before they have sufficient trust in you to finally buy your product. Systematic Direct Marketing is that set of processes - a marketing strategy based on direct marketing methods which will deliver an immediate and sustainable sales improvement. By improvements we mean:

Your lead generation costs will drop, Converting leads into sales will not be due to profit-killing price discounts, and

Your quality clients will form enduring relationships - providing you with profitable repeat sales

The Highly Effective Cycle of Systematic Direct Marketing In order to attract, retain and nurture a list of highly profitable customers, the company needs to craft direct marketing strategy around a number of marketing activities that can start in a fairly simple way, but over time develop into a fairly sophisticated set of direct marketing processes leading to prime aim of expanding. If you cycle through the following direct marketing activities you will experience an unprecedented improvement in your businesss results: Each direct marketing cycle will create a set of clients who can start providing the company with referrals. These lowest cost prospects will supplement the prospects 46

that you attract through your normal ongoing lead generation techniques, yielding an ever-increasing prospect base for you to convert into customers. Services marketing is marketing based on relationship and value. It may be used to market a service or a product. Marketing a service-base business is different from marketing a goods-base business. There are several major differences, including: 1. The buyer purchases are intangible 2. The service may be based on the reputation of a single person 3. It's more difficult to compare the quality of similar services 4. The buyer cannot return the service Service Marketing has been relatively gaining ground in the overall spectrum of educational marketing as developed economies move farther away from industrial importance to service oriented economies. What is marketing? Marketing is the flow of goods and services from the producer to consumer. It is based on relationship and value. In common parlance it is the distribution and sale of goods and services. Marketing can be differentiated as: Marketing of products Marketing of services. Marketing includes the services of all those indulged may it be then the wholesaler retailer, Warehouse keeper, transport etc. In this modern age of competition marketing of a product or service plays a key role. It is estimated that almost 50% of the price paid for a commodity goes to the marketing of the product in US. Marketing is now said to be a term which has no particular definition as the definitions change every day. "Managing the evidence" refers to the act of informing customers that the service encounter has been performed successfully. It is best done in subtle ways like providing examples or descriptions of good and poor service that can be used as a basis of comparison. The underlying rationale is that a customer might not appreciate 47

the full worth of the service if they do not have a good benchmark for comparisons. However, it is worth remembering that many of the concepts, as well as many of the specific techniques, will work equally well whether they are directed at products or services. In particular, developing a marketing strategy is much the same for products and services, in that it involves selecting target markets and formulating a marketing mix. Thus, Theodore Levitt suggested that "instead of talking of 'goods' and of 'services', it is better to talk of 'tangibles' and 'intangibles'". Levitt also went on to suggest that marketing a physical product is often more concerned with intangible aspects (frequently the `product service' elements of the total package) than with its physical . sales after service is very important in service sector. properties. Charles Revson made a famous comment regarding the business of Revlon Inc.: `In the factory we make cosmetics. In the store we sell hope.' Arguably, service industry marketing merely approaches the problems from the opposite end of the same spectrum, INTERNAL INFLUENCES You can start your examination of the influence on consumer purchase decisions by first looking inside yourselves to see which are the most important internal factors that affect how you make choices. Perceptual Filter Perception is how we see ourselves and the world we live in. However, what ends up being stored inside us doesnt always get there in a direct manner. Often our mental makeup results from information that has been consciously or unconsciously filtered as we experience it, a process we refer to as a perceptual filter. To us this is our reality, though it does not mean it is an accurate reflection on what is real. Thus, perception is the way we filter stimuli (e.g., someone talking to us, reading a newspaper story) and then make sense out of it. Perception has several steps. o Exposure Sensing a stimuli (e.g. seeing an ad)

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o Attention An effort to recognize the nature of a stimuli (e.g. recognizing it is an ad) o Awareness Assigning meaning to a stimuli (e.g., humorous ad for particular product) o Retention o Adding the meaning to ones internal makeup (i.e., product has fun ads) How these steps are eventually carried out depends on a persons approach to learning. By learning we mean how someone changes what they know, which in turn may affect how they act. There are many theories of learning, a discussion of which is beyond the scope of this tutorial, however, suffice to say that people are likely to learn in different ways. For instance, one person may be able to focus very strongly on a certain advertisement and be able to retain the information after being exposed only one time while another person may need to be exposed to the same advertisement many times before he/she even recognizes what it is. Consumers are also more likely to retain information if a person has a strong interest in the stimuli. If a person is in need of new car they are more likely to pay attention to a new advertisement for a car while someone who does not need a car may need to see the advertisement many times before they recognize the brand of automobile. Marketing Implication: Marketers spend large sums of money in an attempt to get customers to have a positive impression of their products. But clearly the existence of a perceptual filter suggests that getting to this stage is not easy. Exposing consumers to a product can be very challenging considering the amount of competing product messages (ads) that are also trying to accomplish the same objective (i.e., advertising clutter). So marketers must be creative and use various means to deliver their message Once the message reaches consumer it must be interesting enough to capture the their attention (e.g., talk about the products benefits). But attending to the message is not enough.

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For marketers the most critical step is the one that occurs with awareness. Here marketers must continually monitor and respond if their message becomes distorted in ways that will negatively shape its meaning. This can often happen due in part to competitive activity (e.g., comparison advertisements). Finally, getting the consumer to give positive meaning to the message they have retained requires the marketer make sure that consumers accurately interpret the facts about the product. Knowledge Knowledge is the sum of all information known by a person. It is the facts of the world, as he/she knows it and the depth of knowledge is a function of the breadth of worldly experiences and the strength of an individuals long-term memory. Obviously what exists as knowledge to an individual depends on how an individuals perceptual filter makes sense of the information it is exposed to. Marketing Implications: Marketers may conduct research that will gauge consumers level of knowledge regarding their product. As we will see below, it is likely that other factors influencing consumer behavior are in large part shaped by what is known about a product. Thus, developing methods (e.g., incentives) to encourage consumers to accept more information (or correct information) may affect other influencing factors. Attitude In simple terms attitude refers to what a person feels or believes about something. Additionally, attitude may be reflected in how an individual acts based on his or her beliefs. Once formed, attitudes can be very difficult to change. Thus, if a consumer has a negative attitude toward a particular issue it will take considerable effort to change what they believe to be true. Marketing Implication: Marketers facing consumers who have a negative attitude toward their product must work to identify the key issues shaping a consumers attitude then adjust marketing decisions (e.g., advertising) in an effort to change the attitude. For companies competing against strong rivals to whom loyal consumers exhibit a positive attitude,

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an important strategy is to work to see why consumers feel positive toward the competitor and then try to meet or beat the competitor on these issues. Alternatively, a Birla Sunlife Insurance can try to locate customers who feel negatively toward the competitor and then increase awareness among this group. Personality An individuals personality relates to perceived personal characteristics that are consistently exhibited, especially when one acts in the presence of others. In most, but not all, cases the behaviors one projects in a situation is similar to the behaviors a person exhibits in another situation. In this way personality is the sum of sensory experiences others get from experiencing a person (i.e., how one talks, reacts). While ones personality is often interpreted by those we interact with, the person has their own vision of their personality, called self-concept, which may or may not be the same has how others view us. Marketing Implication: For marketers it is important to know that consumers make purchase decisions to support their self-concept. Using research techniques to identify how customers view themselves may give marketers insight into products and promotion options that are not readily apparent. For example, when examining consumers a marketer may initially build marketing strategy around more obvious clues to consumption behavior, such as consumers demographic indicators (e.g., age, occupation, income). However, in-depth research may yield information that shows consumers are purchasing products to fulfil self-concept objectives that have little to do with the demographic category they fall into (e.g., senior citizen may be making purchases that make them feel younger). Appealing to the consumers self concept needs could expand the market to which the product is targeted. Lifestyle This influencing factor relates to the way we live through the activities we engage in and interests we express. In simple terms it is what we value out of life. Lifestyle is often determined by how we spend our time and money.

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52

VALUES

"Coming into your own", performing as a Leader to be really effective and successful by acting and making decisions independently to get results.

It's all about People, MetLife's key resource. MetLife will succeed because we are winning from within.

Functioning productively in teams towards a common purpose; realising the collective power of diverse work-groups.

Operating with an intense dedication to managing monetary resources for strong business results.

Conducting all business endeavors with truth, sincerity and fairness.

Continuously creating and introducing new and original ideas and ways of doing things.

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PREMIUM PAYMENT OPTIONS

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CHAPTER-2 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

1. To examine the psychographics of insurance customers. 2. To probe the buying behaviour of insurance customers. 3. To find people expectations or satisfaction regarding the insurance. 4. To judge the awareness level of insurance Industry.

Types of research
The basic type of research is: Descriptive research

It includes surveys and fact-finding enquiries of various kinds Exploratory research

It is that research which has not been done earlier in fact is based on the new generalization of the facts. It includes the findings of new enquiries.

EXPLORATORY AND DESCRIPTIVE This research is based on both exploratory and descriptive research. Data collection: The data for the study was mainly secondary. Mainly data was collected from companys data bank and general data was collected from internet. However some data was collected with interaction with different people The study has exploited both the primary and secondary sources of information. The primary source comprised of questionnaires to elicit pertinent responses from the respondents.

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RESEARCH METHODOLOGY
A research design is the arrangement of condition for collection and analysis of data in a manner that to, combine relevance to research purpose with economy in procedure. Research design is conceptual structure within which research is conducted. It constitutes the blue print of collection, measurement and analysis of date. Research design is needed because it facilitates the smooth sailing of various research operations, thereby making research as efficient as possible yielding maximum information with minimum time, effort and money. Research design stands for advance planning of methods to be used for collecting relevant data and techniques to be used in the analysis .the design helps researcher to organize his ideas whereby it will be possible for him to look for flaws and inadequacies. Following questions have to be asked in research design: 1. What is the study about? 2. 3. 4. 5. 6. 7. Why is the study being made? Where will the study be vehcileried on? What type of data is required? Where can data be found? What periods of time will the study includes? What will be the sample design?

8. What technique of data collection ill be used?

RESEARCH DESIGN Sources of data:

1. Primary data:This type of data refers to the information received first hand by the researcher for specific purpose of the study. Such data are original in character. In my study the primary data used will be personal interview and personal observation. 2. Secondary data:This data is one which have already been collected by others. Such data is mostly collected from books and periodicals, media and others. In this study the sources of 57

secondary data are mainly the companys policy manual, annual reports of Birla Sun Life Insurance, magazines & journals and certain websites.

The major aim of the project was to analyze the strategies of shriram group and to study the consumer-buying behaviour for small vehicle customers. For the first part secondary data was collected from various sources that included website of shriram and trade journal that were collected from shriram Delhi office.

SAMLING TECHNIQUE:
For the survey a sample size of 30 employees was taken. The questionnaire was designed in such manner that it is self explanatory, and the data thus collected has been very comprehensive one. The another source of data is the various articles, data reports and the records of the company. After going through the both data and matching the provided figures, we analyzed it. Then a task of tabulating the whole data, editing the whole data and finally analyzing the data was done to come out with certain conclusion. The questionnaire consisted of 10 questions regarding the operational process and knowledge of BIRLA SUNLIFE INSURANCE.

SAMPLE SIZE

20 QUESSIONAIRE

METHOD OF DATA COLLECTION:

LIMITATIONS
1. The secondary data collected might consist of manipulations, which might have given bias in the result. 2. 3. 4. 5. The lack of experience in preparing the project report. Lack of experience in drafting the questionnaire. Lack of knowledge on the part of the respondents regarding the subject matter. Survey results may be prone to sampling errors.

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CHAPTER-3 THEORETICAL PERSPECTIVE

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STUDY OF PROFIT& LOSS A/C OF BIRLA SUNLIFE INSURANCE

It is a financial statement, which shows net loss of a company for a specified period. The accounting year means calendar year of 12 months or less or more than 12 months. CONTENTS: This presents the revenues and expenses of a company and shows the excess of revenues over expenses for profit and vice versa for a loss. FORMAT: The Companies act does not provide any specific format for this account. However it is required to be prepared on the basis of the instructions given in part ii of schedule (VI) of the companies act.

MAIN ITEMS OF PROFIT AND LOSS ACCOUNT

Turnover or sales: The aggregate amount of sales and connected items with the sales such as commission paid to sole-selling agents and other selling agents and brokerage and discounts on sales other than usual trade discount. Depreciation: The amount of depreciation of fixed assets and the arrears of depreciation as per section 205(2) shall be disclosed by way of foot-note. Interest on loans and debentures: Interest on loans and debentures has to be stated separately. It will include the amount of interest paid as well as outstanding. Miscellaneous expenses: In this head items such as rates and taxes, insurance premium etc., must be stated separately. Preliminary expenses: Such expenses include the costs of formation of a company and since their amount is usually large, it is not desirable to write off them in one year. Provision for taxation: The profit and loss account of a company must be debited with the estimated liabilities for tax on the current profits at current rates of taxation. Unclaimed dividends: It is shown on the liabilities side of the balance sheet under the heading current liabilities . 61

 Interim dividends: It is an item of appropriation. It is transferred to the debit side of the Profit and loss appropriation account. Final dividend as an item of the trial balance : This is shown in the debit side of the appropriation section of the profit and loss account. Proposed dividend or final dividend proposed: Since it is an adjustment item, it has to be shown at two places- In the debit side of the profit and loss appropriation account and on the liabilities side of the balance sheet under the head current liabilities and provisions. Political donations: It must be shown as a separate item in the profit and loss account. Dividend on interest income: This item is transferred to the credit side of the profit and loss account. Payment to auditors: It must be stated separately . This will include consultancy fee, auditing fees management services etc. Managerial remuneration: This includes the payments made to managerial remuneration directors fee, pension, other allowances and commission.

STUDY OF BALANCE SHEET The balance sheet is a financial snapshot of a company's condition at a single point in time. A balance sheet contains a listing of the company's asset, liability and Capital accounts. When someone, whether a creditor or investor, asks you how your company is doing, you'll want to have the answer ready and documented. The way to show off the success of your company is a balance sheet. A balance sheet is a documented report of your company's assets and obligations, as well as the residual ownership claims against your equity at any given point in time. It is a cumulative record that reflects the result of all recorded accounting transactions since your enterprise was formed. You need a balance sheet to specifically know what your company's net worth is on any given date. With a properly prepared balance sheet, you can look at a balance sheet at the end of each accounting period and know if your business has more or less value, if your debts are higher or lower, and if your working capital is higher or lower. By analyzing your balance sheet, investors, creditors and others can assess your ability to meet short-term obligations and solvency, as well as your ability

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to pay all current and long-term debts as they come due. The balance sheet also shows the composition of assets and liabilities, the relative proportions of debt and equity financing and the amount of earnings that you have had to retain. Collectively, external parties to help assess your companys financial status, which is required by both lending institutions and investors before they will allot any money toward your business, will use this information. LEARN THE DIFFERENT ASSETS Current assets: Current assets include cash and other assets that in the normal course of events are converted into cash within the operating cycle. For example, a manufacturing enterprise will use cash to acquire inventories of materials. These inventories of materials are converted into finished products and then sold to customers. Cash is collected from the customers. This circle from cash back to cash is called an operating cycle. In a merchandising business one part of the cycle is eliminated. Materials are not purchased for conversion into finished products. Instead, the finished products are purchased and are sold directly to the customers. Several operating cycles may be completed in a year, or it may take more than a year to complete one operating cycle. The time required to complete an operating cycle depends upon the nature of the business. It is conceivable that almost all of the assets that are used to conduct your business, such as buildings, machinery, and equipment, can be converted into cash within the time required to complete an operating cycle. However, your current assets are only those that will be converted into cash within the normal course of your business. The other assets are only held because they provide useful services and are excluded from the current asset classification. If you happen to hold these assets in the regular course of business, you can include them in the inventory under the classification of current assets. Current assets are usually listed in the order of their liquidity and frequently consist of cash, temporary investments, accounts receivable, inventories and prepaid expenses. Cash: Cash is simply the money on hand and/or on deposit that is available for general business purposes. It is always listed first on a balance sheet. Cash held for some designated purpose, such as the cash held in a fund for eventual retirement of a bond issue, is excluded from current assets.

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 Marketable Securities: These investments are temporary and are made from excess funds that you do not immediately need to conduct operations. Until you need these funds, they are invested to earn a return. Accounts Receivable: Simply stated, accounts receivables are the amounts owed to you and are evidenced on your balance sheet by promissory notes. Accounts receivable are the amounts billed to your customers and owed to you on the balance sheet's date. You should label all other accounts receivable appropriately and show them apart from the accounts receivable arising in the course of trade. If these other amounts are currently collectible, they may be classified as current assets. Inventories: Your inventories are your goods that are available for sale, products that you have in a partial stage of completion, and the materials that you will use to create your products. The costs of purchasing merchandise and materials and the costs of manufacturing your various product lines are accumulated in the accounting records and are identified with either the cost of the goods sold during the fiscal period or as the cost of the inventories remaining. Prepaid expenses: These expenses are payments made for services that will be received in the near future. Strictly speaking, your prepaid expenses will not be converted to current assets in order to avoid penalizing companies that choose to pay current operating costs in advance rather than to hold cash. Often your insurance premiums or rentals are paid in advance. Investments: Investments are cash funds or securities that you hold for a designated purpose for an indefinite period of time. Investments include stocks or the bonds you may hold for another company, real estate or mortgages that you are holding for income-producing purposes. Your investments also include money that you may be holding for a pension fund. Plant Assets: Often classified as fixed assets, or as plant and equipment, your plant assets include land, buildings, machinery, and equipment that are to be used in business operations over a relatively long period of time. It is not expected that you will sell these assets and convert them into cash. Plant assets simply produce income indirectly through their use in operations.

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Intangible Assets: Your other fixed assets that lack physical substance are referred to as intangible assets and consist of valuable rights, privileges or advantages. Although your intangibles lack physical substance, they still hold value for your company. Sometimes the rights, privileges and advantages of your business are worth more than all other assets combined. Other Assets: During the course of preparing your balance sheet you will notice other assets that cannot be classified as current assets, investments, plant assets, or intangible assets. These assets are listed on your balance sheet as other assets. Frequently, your other assets consist of advances made to company officers, the cash surrender value of life insurance on officers, the cost of buildings in the process of construction, and the miscellaneous funds held for special purposes.

LEARN THE DIFFERENT LIABILITIES Current Liabilities: On the equity side of the balance sheet, as on the asset side, you need to make a distinction between current and long-term items. Your current liabilities are obligations that you will discharge within the normal operating cycle of your business. In most circumstances your current liabilities will be paid within the next year by using the assets you classified as current. The amount you owe under current liabilities often arises as a result of acquiring current assets such as inventory or services that will be used in current operations. You show the amounts owed to trade creditors that arise from the purchase of materials or merchandise as accounts payable. If you are obligated under promissory notes that support bank loans or other amounts owed, your liability is shown as notes payable. Other current liabilities may include the estimated amount payable for income taxes and the various amounts owed for wages and salaries of employees, utility bills, payroll taxes, local property taxes and other services. Long-Term Liabilities: Your debts that are not due until more than a year from the balance sheet date are generally classified as long-term liabilities. Notes, bonds and mortgages are often listed under this heading. If a portion of your long-term debt is due within the next year, it should be removed from the long-term debt classification and shown under current liabilities.

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Deferred Revenues: Your customers may make advance payments for merchandise or services. The obligation to the customer will, as a general rule, be settled by delivery of the products or services and not by cash payment. Advance collections received from customers are classified as deferred revenues, pending delivery of the products or services. Owner's Equity: Your owner's equity must be subdivided on your balance sheet: One portion represents the amount invested directly by you, plus any portion of retained earnings converted into paid-in capital. The other portion represents your net earnings that are retained. This rigid distinction is necessary because of the nature of any corporation. Ordinarily, stockholders, or owners, are not personally liable for the debts contracted by a company. A stockholder may lose his investment, but creditors usually cannot look to his personal assets for satisfaction of their claims. Under normal circumstances, the stockholders may withdraw as cash dividends an amount measured by the corporate earnings. The distinction in this rule gives the creditors some assurance that a certain portion of the assets equivalent to the owner's investment cannot be arbitrarily withdrawn. Of course, this portion could be depleted from your balance sheet because of operating losses. The owner's equity in an unincorporated business is shown more simply. The interest of each owner is given in total, usually with no distinction being made between the portion invested and the accumulated net earnings. The creditors are not concerned about the amount invested. If necessary, creditors can attach the personal assets of the owners.

BALANCE-SHEET STRUCTURE Basis of balance-sheet: Assets = Liability + Equity The following Balance sheet structure is just an example. It does not show all possible kind of assets, equity and liabilities, but it shows the most usual ones. It could be a consolidated balance sheet. Monetary values are not shown and summary (total) rows are missing as well. Assets Current Assets Cash and cash equivalents Inventories

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Account receivable Investment held for trading Other current assets Non-Current Assets Property, plant and equipment Goodwill Other intangible fixed assets Investment in associates Deferred tax assets Miscellaneous Expenditure

Equity and Liabilities Capital & Reserve Share capital reserve Revaluation reserve Translation reserve Retained earnings Minority interest Non-Current Liabilities Bank loan Issued debt securities Deferred tax liability Current Liabilities Accounts payable Current income tax liability Short-term part of bank loans Short-term provisions

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EQUITY VALUATION: The real value to a purchaser of the business or a shareholder may be different from the net assets shown by the balance sheet. This is because factors that affect the value of a business may not be recorded yet. For example, a purchaser will be interested in the future earnings of the business, whether assets such as property have been revalued recently, and whether there are potential liabilities in the future such as lawsuits. The value of the assets in the balance has also been based on the assumption that the business is a going concern, otherwise the break-up value of the assets may be far less than the value in the balance sheet. PREPAIRING A BALANCE-SHEET Title and Heading: In practice, the most widely used title is Balance Sheet; however Statement of Financial Position is also acceptable. Naturally, when the presentation includes more than one time period the title "Balance Sheets" should be used. Heading: In addition to the statement title, the heading of your balance sheet should include the legal name of your company and the date or dates that your statement is presented. For example, a comparative presentation might be headed: BALANCE SHEETS Format: There are two basic ways that balance sheets can be arranged. In Account Form, your assets are listed on the left-hand side and totaled to equal the sum of liabilities and stockholders' equity on the right-hand side. Another format is Report Form, a running format in which your assets are listed at the top of the page and followed by liabilities and stockholders' equity. Sometimes total liabilities are deducted from total assets to equal stockholders' equity. Captions: Captions are headings within your statement that designate major groups of accounts to be totaled or subtotaled. Your balance sheet should include three primary captions: Assets, Liabilities and Stockholders' Equity. In the report form of presentation, the placement of your primary captions would be as follows: 2006 ASSETS, LIABILITIES AND STOCKHOLDERS EQUITY.

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 Order of Presentation of Captions: First, start with items held primarily for conversion into cash and rank them in the order of their expected conversion. Then, follow with items held primarily for use in operations but that could be converted into cash, and rank them in the order of liquidity. Finally, finish with items whose costs you will defer to future periods or that you cannot convert into cash. STUDY OF CASH FLOW STATEMENT Cash flow statement or statement of cash flows is a financial statement that shows a company's incoming and outgoing money (sources and uses of cash) during a time period (often monthly or quarterly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing, and financing activities. As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. PURPOSE: The cash flow statement reflects a firms liquidity or solvency. The main purpose to make cash flow statement are as follows: 1. provide information on a firm's liquidity and solvency and its ability to change cash flows in future circumstances 2. provide additional information for evaluating changes in assets, liabilities and equity 3. improve the comparability of different firms' operating performance by eliminating the effects of different accounting methods 4. indicate the amount, timing and probability of future cash flows

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ACTIVITIES INVOLVED IN CASH FLOW: The cash flow statement is partitioned into cash flow resulting from operating activities, cash flow resulting from investing activities, and cash flow resulting from financing activities. Operating activities: Operating activities include the production, sales and delivery of the company's product as well as collecting payment from its customers. This could include purchasing raw materials, building inventory, advertising. Investing activities: Investing activities focus on the purchase of the long-term assets a company needs in order to make and sell its products, and the selling of any longterm assets. Financing activities: Financing activities include the inflow of cash from investors such as banks and shareholders, as well as the outflow of cash to shareholders as dividends as the company generates income. Other activities which impact the long-term liabilities and equity of the company are also listed in the financing activities section of the cash flow statement. Analysis of cash flow statement is necessary for every organisation to depict its cash inflow and outflow.

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FINANCIAL STATEMENT ANALYSIS Financial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information. It is a valuable tool used by investors and creditors, financial analysts, and others in their decision-making processes related to stocks, bonds, and other financial instruments. With a great understanding of the balance sheet & p&l account and how it is constructed, we can look at some techniques to analyze the information contained within the balance sheet & p&l account.

PURPOSE: The main purpose of analyzing the financial statement are the following: To assess past performance and current financial position. To make predictions about the future performance of a company.

TOOLS FOR ANALYSING 1. PERCENTAGE CALCULATION There are two popular methods by which we can analyze the financial statement by calculating percentage as taking a common base. Horizontal Analysis When an analyst compares financial information for two or more years for a single company, the process is referred to as horizontal analysis, since the analyst is reading across the page to compare any single line item, such as sales revenues. In addition to comparing dollar amounts, the analyst computes percentage changes from year to year for all financial statement balances, such as cash and inventory. Alternatively, in comparing financial statements for a number of years, the analyst may prefer to use a variation of horizontal analysis called trend analysis. Trend analysis involves calculating each year's financial statement balances as percentages of the first year, also known as the base year. When expressed as percentages, the base year figures are always 100 percent, and percentage changes from the base year can be determined.

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If we want to calculate % change in sales then we apply the following formula: Percentage=change in sales /Base Year Sales*100 Vertical Analysis When using vertical analysis, the analyst calculates each item on a single financial statement as a percentage of a total. The term vertical analysis applies because each year's figures are listed vertically on a financial statement. The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is total assets. This approach to financial statement analysis, also known as component percentages, produces commonsize financial statements. Common-size balance sheets and income statements can be more easily compared, whether across the years for a single company or across different companies. If we want to calculate % change of current assets then we apply the following formula: Percentage: current assets/total assets*100 2. RATIO ANALYSIS Financial ratio analysis uses formulas to gain insight into the company and its operations. For the balance sheet, using financial ratios (like the debt-to-equity ratio) can show you a better idea of the companys financial condition along with its operational efficiency. It is important to note that some ratios will need information from more than one financial statement, such as from the balance sheet and the income statement. Ratio analysis facilitates inter-firm and intra-firm comparison. Ratios are often classified using the following terms: LIQUIDITY RATIO Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash.

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Current Ratio: The current ratio is a rough indication of a firm ability to service its current obligations. Generally, the higher the current ratio, the greater the cushion between current obligations and a firm ability to pay them. The stronger ratio reflects a numerical superiority of current assets over current liabilities Current ratio is calculated as follows: Current ratio= Current Assets/Current Liabilities

Quick Ratio: It is also known as the acid test ratio, this is a refinement of the current ratio and is a more conservative measure of liquidity. The quick ratio expresses the degree to which a companys current liabilities are recovered by the most liquid current assets. follows: Quick ratio= (cash + marketable securities + Receivables)/current liabilities quick ratio is calculated as

SOLVENCY RATIO Solvency ratios indicate the ability of the company to meet its long-term obligations on a continuing basis and thus to survive over a long period of time. Debt/Worth Ratio: This ratio expresses the relationship between capital contributed by creditors and that contributed by owners. It expresses the degree of protection provided by the owners for the creditors. The higher the ratio, the greater the risk being assumed by creditors. The lower the ratio, the greater the long-term financial safety. A firm with a low debt/worth ratio usually has a greater flexibility to borrow in the future. A more highly leveraged company has a more limited debt capacity. Debt/worth ratio=Total Liabilities / Tangible Net Worth PROFITABILITY RATIO Profitability ratios are gauges of the company's operating success for a given period of time. Return On Assets: Return on assets is a measure of how effectively the firms assets are being used to generate profit. It is calculated as follows: Return On Assets= Net Income/Total Assets

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Return On Equity: Return on equity is the bottom line measure for the shareholders, measuring for the profits earned for each rupee invested in business. It is calculated as follows: Return on Equity= Net income/shareholders equity

Fixed/Worth Ratio: This ratio measures the extent to which owners equity (capital) has been invested in plant and equipment (fixed assets). A lower ratio indicates a proportionately smaller investment in fixed assets in relation to net worth and a better cushion for creditors in case of liquidation. Similarly, a higher ratio would indicate the opposite situation. The presence of substantial leased fixed assets (not shown on the balance-sheet ) may deceptively lower this ratio. Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth

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CHAPTER-4 DATA ANALYSIS

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DATA ANALYSIS

1.Which Birla life plan do you have? Table 5.1 : Type Of Plan Types of plan Life insurance plan Health insurance plan Retirement plan Total No of respondent 68 10 22 100 Percentage 68% 10% 22% 100%

Figure. 5.1 : Type Of Plan

Analysis & Interpretation: The objective of first question was people having an account with BSLI are having which type of plan. In the survey of 100 people it was found that 68% have life insurance plan, 22% have retirement plan and 10% were having health insurance plan.

2.Are you satisfied with the plan you have?

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Table 5.2 : Satisfaction With The Plan People satisfied with plan Yes No Total No of respondent 72 28 100 Percentage 72% 28% 100%

Figure 5.2 : Satisfaction With The Plan

Analysis & Interpretation: The objective of second question was to find out that how many people are satisfied with the plan. In the survey of hundred people it was found that 72% people are satisfied with the plan while 28% people are not satisfied with the plan.

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3.Are you satisfied with the service provided by the company about new schemes and plans Table 5.3 : Satisfaction With The Services Of The Company Are people satisfied with service provided by company Yes No Total No of respondent 82 18 100 Percentage 82% 18% 100%

Figure 5.3 : Satisfaction With The Services Of The Company

Analysis & Interpretation: The objective of third question was to find out whether people are satisfied with the services provided by the company. In the survey it was found that 82% people are satisfied with the services provided by the company while 18% people are not satisfied with the services.

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4.Are you interested to make more investments in BSLI?

Table 5.4 : People Want To More Investment In Bsli People want to more investment in BSLI Yes No Total No of respondent 67 33 100 Percentage 67% 33% 100%

Figure 5.4 : People Want To More Investment In Bsli

Analysis & Interpretation: The objective of fourth question was to find out that do people want to invest more money. It was found that 67% people want to invest more money while 33% people dont want to invest more money.

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5. Number of people have other insurance plan apart from BSLI Table 5.5 : People Have Other Insurance Plan Apart From Bsli People have other insurance plan apart from BSLI Yes No Total 78 22 100 78% 22% 100% No. of people Percentage

Figure 5.5 : People Have Other Insurance Plan Apart From Bsli

Analysis & Interpretation: The objective of fifth question was whether people have insurance plan apart from BSLI. In the survey it was found that 78% people have insurance plan other than BSLI while 22% dont have any other plan.

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6.Percentage share of different companies in insurance sector. Table 5.6 : Share of different companies Name of different companies Life insurance company Birla Sun Life Insurance Bajaj Aliyanz ICICI Other Total Percentage 60% 9% 11% 8% 12% 100%

Figure 5.6 : Share of different companies

Analysis & Interpretation: The objective of this study is to find out the percentage share of different companies in the insurance sector. it was found that 60% is occupied by LIC,9% by BSLI,11% by Bajaj aliyanz,8% by ICICI and 12% by other companies.

7. Market share of private companies.

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Table 5.7 : Market share of private companies List of companies ICICI pru Bajaj Alliaz SBI HDFC standard Birla sun life insurance Reliance life Max new York Tata AIG Aviva Kotak Mahindra Met life ING vysya Shriram life Other Total Percentage 22.1% 13.8% 9.8% 7.7% 7.0% 8.0% 8.0% 7.0% 3.1% 3.6% 5.3% 2.1% 1.1% 1.1% 100%

Figure 5.7 : Market share of private companies

Analysis & Interpretation: The objective of this study is to find out the market share of different companies in the insurance sector. It was found that icici pru is having the maximum share that is 22.1%.

Importance of Ratio Analysis:

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As a tool of financial management, ratios are of crucial significance. The importance of ratio analysis lies in the fact that it presents facts on a comparative basis & enables the drawing of interference regarding the performance of a firm. Ratio analysis is relevant in assessing the performance of a firm in respect of the following aspects: 1) Liquidity position 2) Long-term solvency 3) Operating efficiency 4) Overall profitability 5) Inter firm comparison 6) Trend analysis 1) Liquidity position With the help of Ratio analysis conclusion can be drawn regarding the liquidity position of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its current obligation when they become due. A firm can be said to have the ability to meet its short-term liabilities if it has sufficient liquid funds to pay the interest on its short maturing debt usually within a year as well as to repay the principal. This ability is reflected in the liquidity ratio of a firm. The liquidity ratio is particularly useful in credit analysis by bank & other suppliers of short term loans. 2) Long-term solvency Ratio analysis is equally useful for assessing the long-term financial viability of a firm. This respect of the financial position of a borrower is of concern to the longterm creditors, security analyst & the present & potential owners of a business. The long-term solvency is measured by the leverage/ capital structure & profitability ratio analysis s that focus on earning power & operating efficiency. Ratio analysis reveals the strength & weaknesses of a firm in this respect. The leverage ratios, for instance, will indicate whether a firm has a reasonable proportion of various sources of finance or if it is heavily loaded with debt in which case its solvency is exposed to serious strain. Similarly the various profitability ratios would reveal whether or not the firm is able to offer adequate return to its owners consistent with the risk involved. 3) Operating efficiency 83

Yet another dimension of the useful of the ratio analysis, relevant from the viewpoint of management, is that it throws light on the degree of efficiency in management & utilization of its assets. The various activity ratios measure this kind of operational efficiency. In fact, the solvency of a firm is, in the ultimate analysis, dependent upon the sales revenues generated by the use of its assets- total as well as its components. 4) Overall profitability Unlike the outsides parties, which are interested in one aspect of the financial position of a firm, the management is constantly concerned about overall profitability of the enterprise. That is, they are concerned about the ability of the firm to meets its short term as well as long term obligations to its creditors, to ensure a reasonable return to its owners & secure optimum utilization of the assets of the firm. This is possible if an integrated view is taken & all the ratios are considered together. 5) Inter firm comparison Ratio analysis not only throws light on the financial position of firm but also serves as a stepping-stone to remedial measures. This is made possible due to inter firm comparison & comparison with the industry averages. A single figure of a particular ratio is meaningless unless it is related to some standard or norm. One of the popular techniques is to compare the ratios of a firm with the industry average. It should be reasonably expected that the performance of a firm should be in broad conformity with that of the industry to which it belongs. An inter firm comparison would demonstrate the firms position vice-versa its competitors. If the results are at variance either with the industry average or with those of the competitors, the firm can seek to identify the probable reasons & in light, take remedial measures.

FINDINGS
To be successful in marketing of insurance products, the entire business scenario has to be taken into account.

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 During the study to be found that majority of people are aware of life insurance sector. During the survey it was observed that major source of information for consumer are television and newspaper and least preference are given to magazines, agents and friends. Attractive schemes and brand image are the most important factor that influences the buying behavior of the consumers. Majority of respondents will shift to any other insurance company. People are not satisfied with the opted insurance. It was found that the reason for the dissatisfaction of consumer is high premium, delay in claim settlement and poor after sale service. So to achieve a greater insurance penetration, insurance sector companies have to create a more vibrant and competitive industry, with greater efficiency, choice of products and value for customers.

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RECOMMENDATIONS & SUGGESTIONS

1) Even though most of the policy holders are satisfied with policies, plans they have but some new attractive insurance plans should be introduce to bind them not to switch over to other companies insurance plans. 2) The company should find out the no. of people who are not having any of the insurance plans through an intensive market research and motivate them to get insured. 3) Leveraging technology to service customers quickly, efficiently and conveniently. 4) Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders. 5) Company should target each and every class of the society 6) Company should provide full information to the customers before targeting so they can take interest.

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CONCLUSION
The market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreign insurance companies have to take immediate steps in appointing more number of agents and/or advisors in addition to the employees as it has been found out that agents are the best channel to reach the general public regarding selling of insurance products. The private and foreign insurance companies have to concentrate on the factors like 'Prevention of Loss', 'Assured Returns' and 'Long term Investment'. They can also focus on an insurance amount of Rs. 1 2 lakhs with 'money back policies'. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it easily & rapidly.

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BIBLIOGRAPHY

Books: Kothari C.R. (1990) Research Methodology: Method and Techniques, Wishva Parkashan, New Delhi. PP115-117 Bodie. Z, Kane. A & Marcus. J : Essentials of Investments PP242-243

Websites: http://www.economywatch.com/indianeconomy/indian-insurance-sector.html www.birlasunlife.com/birlasunlife/insurance/bsli.../index5.aspx http://www.indianmba.com/Occasional_Papers/OP85/op85.html http://www.banknetindia.com/finance/insure2011.htm http://www.financialexpress.com/news/the-indian-insurance-sector-ii/181428/

Journals: Lect. D.ramkumar(2003), Relationship Marketing The new tantra for life insurance sector. Department Of Management Studies, N.M.S.S. Vallaichamy Nadir College, Nagamalai, Madurai 625019 available at http://www.google.co.in/interstitial? url=http://www.indiaschools.com/marketing_029.htm last accessed on 07-082009. Dr. Ch.rajesham (2004), changing scenario of india insurance sector, department of commerce & Business Management, University P G college, Kakatiya University Khammam, Andhra Pradesh available at http://www.insuranceinstituteofindia.com/insuranceinst/publication/uploads/jo urnal-jan-jun-04/chapter10..pdf last accessed on 14-08-2009 J.Mehra (2005), innovations in life insurance industry, the financial express, new delhi available at http://www.financialexpress.com/news/innovations-inlife-insurance-industry last accessed on 15-08-2009.

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QUESSIONAIRE
Name Age - ____________________ - ____________________

Occupation - ____________________ Ques.1 Which Birla Sun Life Scheme do you have? Health Retirement Life Health Retirement Life

Ques.2 Are you satisfied with the Insurance plan you have? (a) Yes (b) No

Ques.3 what attract you towards Birla Sun Life Plans? (a) (b) (c) (d) Ques.4 Are you satisfied with the services provided by the company Regarding new plans and schemes? (a) Yes (b) No

Ques.5 Are you interested to make more investments in Birla Sun Life ? (a) Yes (b) No

Ques.6 Have you any other Insurance Plan apart from Birla Sun Life? (a) Yes (b) No

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Ques.7 If yes, then of which Life Insurance Company? (a) LIC (c) Birla Sunlife (e) Others (b) Bajaj Allianz (d) Reliance

Ques.8 If you get any attractive plan than are you ready to switch over? (a) Yes (b) No

Ques.9 If you get any attractive plan than are you ready to switch over? (a) Yes (b) No

Your comments on Birla Life Insurance

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