PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated debate for some years. The policy makers where in the catch 22 situation wherein for one they wanted competition, development and growth of this insurance sector which is extremely essential for channeling the investments in to the infrastructure sector. At the other end the policy makers had the fears that the insurance premium, which are substantial, would seep out of the country; and wanted to have a cautious approach of opening for foreign participation in the sector. As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw the day of the light thanks to the maturing polity emerging consensus among factions of different political parties. Though some changes and some restrictive clauses as regards to the foreign participation were included the IRDA has opened the doors for the private entry into insurance. Whether the insurer is old or new, private or public, expanding the market will present multitude of challenges and opportunities. But the key issues, possible trends, opportunities and challenges that insurance sector will have still remains under the realms of the possibilities and speculation. What is the likely impact of opening up Indias insurance sector? The large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. The critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks 1

did until recently. This seems to be a logical strategy. Start-up costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, the middle-market segment too has great potential. Since insurance is a volumes game. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped

EXECUTIVE SUMMARY
In todays corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE has given me the opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer.

CHAPTER I

INDIAN INSURANCE INDUSTRY AN OVERVIEW

THE INSURANCE INDUSTRY IN INDIA AN OVERVIEW

With the largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 1560.41 billion (for the financial year 2006 2007). Together with banking services, it adds about 7% to the countrys Gross Domestic Product (GDP). The gross premium collection is nearly 2% of GDP and funds available with LIC for investments are 8% of the GDP. Even so nearly 65% of the Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. A large part of our population is also subject to weak social security and pension systems with hardly any old age income security A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and strengthens the risk taking ability of individuals. It is estimated that over the next ten years India would require investments of the order of one trillion US dollars.

HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge the same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by

the British. Till the end of the nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the 1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over the insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create the much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State led planning and development. The non-life insurance business continued to thrive with the private sector till 1972. Their operations were restricted to organized trade and industry in large cities. The general insurance industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and grouped into four companies- National Insurance Company, New India Assurance Company, Oriental Insurance Company and United India Insurance Company. These were subsidiaries of the General Insurance Company (GIC).

KEY MILESTONES
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers along with provident societies were taken over by the central government and nationalized. LIC was formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

INDUSTRY REFORMS
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

PRESENT SCENARIO - LIFE INSURANCE INDUSTRY IN INDIA

The life insurance industry in India grew by an impressive 47.38%, with premium income at Rs. 1560.41 billion during the fiscal year 2006-2007. Though the total volume of LIC's business increased in the last fiscal year (2006-2007) compared to the previous one, its market share came down from 85.75% to 81.91%.

The 17 private insurers increased their market share from about 15% to about 19% in a year's time. The figures for the first two months of the fiscal year 2007-08 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. With the opening up of the insurance industry in India many foreign players have entered the market. The restriction on these companies is that they are not allowed to have more than a 26% stake in a companys ownership. Since the opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 19 private life insurance companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. Some of these products include investment plans with insurance and good returns (unit linked plans), multi purpose insurance plans, pension plans, child plans and money back plans. (www.wikipedia.com)

CHAPTER II

PROFILE OF ORGANIGATION

10

INTRODUCTION TO THE COMPANY

COMPANY PROFILE OF RELIANCE LIFE INSURANCE

FOUNDER Few men in history have made as dramatic a contribution to their countrys economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of Indias capital markets, the champion of shareholder interest.

But the role Dhirubhai cherished most was perhaps that of Indias greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, Indias largest private sector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossusan achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so.

Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks.

11

Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets.

Under Dhirubhais extraordinary vision and leadership, Reliance scripted one o f the greatest growth stories in corporate history anywhere in the world, and went on to become Indias largest private sector enterprise.

Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the worlds largest shareholder families.

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ABOUT RELIANCE Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services.

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934.

Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.

Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates.

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CORPORATE OBJECTIVE

At Reliance Life Insurance, we strongly believe that as life is different at every stage, life insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our well-trained advisors, backed by competent marketing and customer services, in the best possible way.

It is our aim to become one of the top private life insurance companies in India and to become a cornerstone of RLI integrated financial services business in India.

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CORPORATE MISSION

To set the standard in helping our customers manage their financial future.

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY RELIANCE LIFE INSURANCE INSURANCE PLANS AVAILABLE 1. Products (Individual Plans) Savings (Endowment) 2. Reliance Endowment Plan (formerly Divya Shree) 3. Reliance Special Endowment Plan (formerly Subha Shree) 4. Reliance Cash Flow Plan (formerly Dhana Shree) 5. Reliance Child Plan (formerly Yuva Shree) 6. Reliance Whole Life Plan (formerly Nithya Shree) Pensions 7. Reliance Golden Years Plan (formerly Bhagya Shree) Investments 8. Reliance Market Return Plan (formerly Kanaka Shree) 9. Risk / Protection 10. Reliance Term Plan (formerly Raksha Shree)

15

Products (Group / Corporate Plans) 11. Risk (Protection) Reliance Group Term Assurance Policy (formerly Group Term Assurance Policy) Reliance EDLI Scheme (formerly EDLI Scheme) 12. Pensions a. Reliance Group Gratuity Policy (formerly Group Gratuity Policy) b. Reliance Group Superannuation Policy (formerly Group Superannuation Policy) 13. Reliance Money Guarantee Plan

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Tax Benefits
INCOME SECTION Sec. 80C TAX GROSS SALARY ANNUAL HOW MUCH TAX HDFC CAN YOU SAVE? Rs. STANDARD

LIFE PLANS the life insurance

Across All income Upto Slabs

33,990 All

saved on investment plans. of Rs. 1,00,000.

Sec. 80 CCC

Across slabs.

all

income Upto

Rs.

33,990 All the pension plans.

saved on Investment of Rs.1,00,000.

Sec. 80 D

Across slabs

all

income Upto Rs. 3,399 saved All the health insurance on Investment of riders available with the conventional plans.

Rs. 10,000. TOTAL SAVINGS

Rs37,389 Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under Sec. 80 D, calculated for a male with gross annual income exceeding Rs. 10,00,000.

POSSIBLE

Sec. 10 (10)D

Under Sec. 10(10D), the benefits you receive are completely tax-free, subject to the conditions laid down therein.

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2.2 OTHER COMPETITIORS

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise peoples savings for nationbuilding activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent.

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Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

General Insurance Corporation of India (GIC)

The general insurance industry in India was nationalized and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalization, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Limited; and (iv) United India Insurance Company Limited. (However, with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies). All the above four subsidiaries of GIC operate all over the country competing with one another and underwriting various classes of general insurance business except for aviation insurance of national airlines and crop insurance which is handled by the GIC. Besides the domestic market, the industry is presently operating in 17 countries directly through branches or agencies and in 14 countries through subsidiary and associate companies.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given

19

immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 82 %( 2004-05).

1. HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups.

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2. Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India.

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3. ICICI

Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 banc assurance and 150 corporate agent tie-ups.

22

4. Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. 5.Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. Tata AIG Life Insurance Company Ltd. SBI Life Insurance Company Limited ING Vysya Life Insurance Company Private Limited Allianz Bajaj Life Insurance Company Ltd. Metlife India Insurance Company Pvt. Ltd. AMP SANMAR Assurance Company Ltd. Dabur CGU Life Insurance Company Pvt. Ltd.

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1. Royal Sundaram Alliance Insurance Company

The joint venture bringing together Royal & Sun Alliance Insurance and Sundaram Finance Limited started its operations from March 2001. The company is Head Quartered at Chennai, and has two Regional Offices, one at Mumbai and another one at New Delhi.

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2. Bajaj Allianz General Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

25

3. ICICI Lombard General Insurance Company Limited

ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank, while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001.

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4. Cholamandalam General Insurance Company Ltd.

Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. The company has a pan-Indian presence with offices in Chennai, Hyderabad, Bangalore, Kochi, Coimbatore, Mumbai, Pune, Indore, Ahmedabad, Delhi, Chandigarh, Kolkata and Vizag. 5. TATA AIG General Insurance Company Ltd. Tata AIG General Insurance Company Ltd. is a joint venture company, formed from the Tata Group and American International Group, Inc. (AIG). Tata AIG combines the strength and integrity of the Tata Group with AIG's international expertise and financial strength. The Tata Group holds 74 per cent stake in the two insurance ventures while AIG holds the balance 26 per cent stake. Tata AIG General Insurance Company, which started its operations in India on January 22, 2001, offers the complete range of insurance for automobile, home, personal accident, travel, energy, marine, property and casualty, as well as several specialized financial lines.

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2.3 Reliance

Policies

(1) Reliance Children Plans

What could make you happier than knowing, that your child's future is secure? Nothing, we suppose. Which is why, Reliance Life Insurance brings to you Reliance Secure Child Plan, a unit-linked Insurance Plan, that gives you the freedom to enjoy today with your child, because his tomorrow is in safe hands.

Do you see your child becoming a trailblazer? Will they create the ultimate symphony or give sports a new dimension?

Our children may just be the ones to end the arms race and wipe out poverty from the face of the Earth. But for them to be able to aim for the skies, YOU NEED TO ACT NOW!

Introducing Reliance Secure Child Plan - a unique life insurance cum savings plan. secure the future of your child.

Key Features Insurance cover on the life of child Your child is completely protected - we will continue to pay the premiums even if you are not alive Life time income to child in the event of disability Return Shield option to protect your investment returns Liquidity in the form of partial withdrawals

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Capital guarantee available on maturity and on death of the child for basic and top-up premiums Option to package with Accidental Death and Total and Permanent Disablement Rider, Critical Conditions Rider and Term Life Insurance Benefit Rider.

29

(2)Reliance Health + Wealth Policy

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER.

There are times when late working hours take precedence over your health check-ups. And there are times when a visit to the doctor seems more important than dividends on your shares. In the rat race to make money, we often forget to take care of ourselves.

We understand this predicament. Here is a plan that will ensure that your wealth keeps increasing constantly and yet your health does not take a backseat. The Reliance Wealth Health Plan. A plan that gives you the benefits of wealth bhi. health bhi.

Life changes. And as it does, so do your priorities. After all, the circumstances of your life can determine the type of health coverage you need. India has made rapid strides in the health sector. Since Independence, life expectancy has gone up markedly and survival rates have also increased, still critical health issues remain. Infectious diseases continue to claim a large number of lives. Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance Life Insurance Company Limited, is designed to work in conjunction with contributions towards savings.

Key Feature A Unit Linked plan with Unique Savings Component Twin benefit of market linked return and health protection Choose from two different plan options Flexibility to take care of your familys health Flexibility to switch between funds / plan options Option to pay Top-ups

(3) Reliance Pension Policy

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. 30

Retirement means different things to different people, while some want to relax and take a trip around the world, some want to start up a venture of their own, and pursue a dream harnessed for years. The power to make your autumn years special lies only with you. The Reliance Super Golden Years Plan gives you the power and the right kind of solution - A retirement plan that allows you to save systematically and generate the much-needed corpus to make your olden years look golden. Key Features Reliance Pension Policy : Invest systematically and secure your golden years A flexible unit-linked pension product that is different from traditional life insurance products with Vesting Age between 45 & 70 years Eight different investment funds to choose from Flexibility to switch between funds Option to pay Regular, Single as well as Top-up premiums Flexibility to advance / extend your Vesting Age Tax free commutation up to one third of Fund Value at Vesting Age

31

(4) Reliance Whole life insurance policy

Youve always loved your family. As a loving person you want to be rest assured that they will be happy, even if something were to happen to you. With Reliance Whole Life Plan you can be sure that your family will receive that timely financial support they need. Go ahead, live your today to the fullest, without a worry about tomorrow.

Key Features Insurance protection till age 85 Choice of extending your insurance coverage till age 99 Convenient Premium Payment Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Get Sum Assured plus Bonuses in case of your unfortunate death Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy Loan available after three full years premium payment

32

CHAPTER III OBJECTIVES OF STUDY

33

The main of the present study of is accomplish the following objective. Proper understanding and analysis of life insurance industry. To know about brand awareness of Kotak Life Insurance and customers preference about Kotak Life Insurance. According the market survey come know about how much potential of insurance market in our city. And base on analysis of the result thus obtained make a report on that research. Training aims at recruiting maximum number of Life Advisors and to Sell the maximum policies for the company and bring the business for the company which ever is going at the particular point of time. As the Kotak Life Insurance well reputed company in India its great chance for me to observed different products launch by other competitor companies like ICICI prudential, Bajaj alliance ,LIC, Max New York life etc. In all, it is to understand the overall working of the Life insurance sector. The objective behind the project is as follows: To find the right candidate. To about their family background, occupation, social relation, Qualification, Age.

34

CHAPTER IV RESEARCH METHODOLOGY

35

RESEARCH METHODOLOGY
TITLE:
To determine customer-buying behavior with a focus on market segmentation for Reliance Life Insurance. TITLE JUSTIFICATION: The above title is self explanatory. The study deals mainly with studying the buying pattern in the insurance industry with a special focus on Reliance life Insurance. The various segments of the markets divided in terms of Insurance Needs, Age groups , Satisfaction levels etc will also studied. OBJECTIVE Objective One To determine reasons behind opting for an insurance. To provide the company with information of customer's Insurance policy if they have any and reasons for opting for that particular policies. To know the most preferred policy.

Objective Two To determine customers perception towards private insurance companies and their expectation form private insurance companies. To determine the feedback on services provided by any other insurance agent. To study the types of benefits provided by insurance services.

36

To determine the use of Internet for valuable information and decision-making process.

SCOPE OF THE STUDY A big boom has been witnessed in Insurance Industry in recent times. A large number of new players have entered the market and are vying to gain market share in this rapidly improving market. The study deals with Reliance in focus and the various segments that it caters to. The study then goes on to evaluate and analyse the findings so as to present a clear picture of trends in the Insurance sector. SIGNIFICANCE OF THE STUDY SIGNIFICANCE TO THE INDUSTRY : This is a limited study which takes into consideration the responses of 100 people. This data can be explorated to take in the trends across the industry. The significance for the industry lies in studying these trends that emerge from the study. It is a rapiddly changing and evolving sector. People are only beginning to wake up to its vast possibilities. A study like this can attempt to guide the future of the industry based on current trends. SIGNIFICANE FOR THE RESEARCHER : To facilitate and provide all the useful informtaion of the studt, the company, the insurance industry and also provide marketing ways, methods of reliance life insurance. RESEARCH DESIGN NON-PROBABILITY EXPLORATORY & DISCRIPTIVE EXPERIMENTAL RESEARCH

37

The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. A well-structured questionnaire was prepared and personal interviews were conducted to collect the customers perception and buying behavior, through this questionnaire. SAMPLING METHODOLOGY SamplingTechnique: Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. Thus my sampling came out to be judemental and convinent Sampling Unit: The respondants who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, Self Employeds etc. Sample size: The sample size was restricted to only 100, which comprised of mainly peoples from different regions of Delhi due to time constraints. Sampling Area : The area of the research was New Delhi, India.

38

LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of Delhi and does not necessarily shows a pattern applicable to all of Country. 2. Some respondents were reluctant to divulge personal information which can affect the validity of all responses. 3. In a rapidly changing industry, analysis on one day or in one segment can change very quickly. The environmental changes are vital to be considered in order to assimilate the findings.

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MARKETING STRATREGIES OF THE COMPANY

SOME OF THE STRATEGIES ADOPTED BY RELIANCE LIFE INSURANCE COMPANY.

Reliance Life Insurance plans to tap Reliance Communications' 2.5-crore telephony subscriber base to market its products.

The company is considering a series of options to leverage its relationship with Reliance Communications.

However, a joint product or a co-branded solution would require approval from the Insurance Regulatory and Development Authority

Customers of R World, the information and entertainment portal of Reliance Communications, would also be able to pay premiums through a bank account, provided the bank is listed on the network.

Reliance Life Insurance officials, however, offered no comment when asked whether there would be an arrangement for payment of commission to Reliance Communications.

As an alternative channel for distribution, insurance companies usually tie up with banks. In the case of banc assurance, where there is a corporate agency tie-up, the commission could range from 5 per cent to 40 per cent of first-year premium depending on the commission loaded on to the product at the time of registration with IRDA.

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CHAPTER V RESULT ANALYSIS & INTERPRETATION

41

DATA ANALYSIS & INTERPRETATION

DATA GIVES PREFERENCE OF RESPONDENTS OF INSURANCE COMPANIES

COMPANYS NAME L.I.C. RELIANCE LIFE INSURANCE ICICI PRUDENTIAL SBI LIFE HDFC TOTAL NO.OF RESPONDENT 78 3 10 7 2 100 SHARE (%) 78 3 10 7 2 100

7 10 3

2 LIC REL ICICI SBI 78 HDFC

INTERPRETATION 78% of the people contacted prefer LIC policy to any other and therefore it is ranked no.1 by that percent of respondents.

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DATA

GIVES

BENEFITS

OF

INSURANCE

PERCEIVED

BY

RESPONDENTS
BENEFITS Cover Future Uncertainty Tax Deductions Future Investment TOTAL NO.OF RESPONDENTS 55 20 25 100 SHARE (%) 55 20 25 100

25%

Cover Future Uncertainty Tax Deductions 55%

20%

Future Investment

INTERPRETATION 55% of the respondents believe that covering future uncertainty is the biggest benefit of an insurance policy. Whereas, 20% and 25% of them believe that the other benefits are Tax deduction and future investments respectively. DATA PROVIDES FEATURES OF INSURANCE ATTRACTED RESPONDENTS 43 POLICY THAT

FEATURE Money Back Guarantee Larger Risk Coverance Easy Access to Agents Low Premium Companys Reputation TOTAL

NO.OF RESPONDENTS 15 37 7 30 11 100

SHARE (%) 15 37 7 30 11 100

FEATURES OF INSURANCE POLICY

MONEY BACK GUAARENTEE

11%

15%

LARGER RISK COVERANCE

30% 7%

37%

EASY ACCESS TO AGENTS

LOW PREMIUM

REPUTATION OF COMPANY

INTERPRETATION Majority of the respondent (37%) found Larger risk coverance as the most attracted feature of the all.

44

 DATA

PROVIDES

NUMBER

OF

INSURANCE

POLICY

TYPE

RESPONDENTS
POLICY TYPE NO. OF RESPONDENTS 75 25 45 SHARE (%)

LIFE POLICY NON LIFE POLICY BOTH

75 25 45

NATURE OF POLICY

45

LIFE POLICY

75

NON LIFE POLICY

25

BOTH

INTERPRETATION 75% of the respondents have Life Insurance Policy while 45% have both. (The % is calculated out of 280 positive response)

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 DATA GIVES PEOPLE PERCEPTION ABOUT INSURANCE

RESPONSE NO. OF RESPONDENTS SHARE (%)

A saving tool A tax saving device A tool to protect your family

81 74 100

81% 74% 100%

0 0 100 0 81 SAVING TOOL 74 TAX SAVING TOOL FAMILY PROTECTION

INTERPRETATION 81% of the respondents have perception of Insurance being a saving tool. And 74% of the respondents have perception of Insurance being a tax saving device. But 100% of the respondents are with the view that Insurance is a tool to protect your family.

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 DATA SHOWS PEOPLES HAVING INSURANCE

RESPONSE NO. OF RESPONDENTS 70 30 SHARE (%)

Yes No

70% 30%

30%

70%

Yes No

Total

100

100%

INTERPRETATION Of the sample size of 400 surveyed respondents 70% of the respondents are having Insurance policy. 30% of the respondents are either not having any Insurance policy at present or their policy is already matured. And at present 100% of the respondents are with the view that Insurance is a tool to protect your family.

DATA SHOWS BUYING PROCESS OF THE PEOPLE

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BUYING PROCESS

NO. OF RESPONDENTS 45

SHARE (%)

Customer approached Insurance company/Agent Company/agent approached customer Total

45%

55

555

100

100%

56% 44%

Customer approached Insurance company/Agent Company/agent approached customer

INTERPRETATION 44.5% of the respondents approached the Insurance Company / Agent. Whereas, 55.5% of the respondents were approached by the Company /Agent.

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 DATA SHOWS REASONS BEHIND FOR INSURANCE

RESPONSE NO. OF RESPONDENTS 80 80 100 SHARE (%)

Tax saving Saving / Investment Family protection

80% 80.% 100%

80

100

80

INTERPRETATION 80.71% of the Respondents opted for Insurance for tax saving benefits. 80.71% of the Respondents opted for saving / Investments. But all of them, i.e. 100% of the respondents have opted for insurance for their family protection.

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 DATA SHOWS SATISFACTION OF RESPONDENTS WITH RESPECT TO POLICY

RESPONSE NO. OF RESPONDENTS 60 40 0 100 SHARE (%)

Satisfied Not satisfied Not Responded Total

60% 40% 0.0% 100%

40%

0%

60%

Satisfied

Not satisfied

Not Responded

INTERPRETATION 60% of the respondents are more or less satisfied with their existing policy. 40% of the respondents are not satisfied with their existing policy. In this case all of those who have taken a policy have responded.

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 DATA SHOWS SATISFACTION OF +RESPONDENTS WITH RESPECT TO SERVICE AGENT

RESPONSE NO. OF RESPONDENTS 45 55 0 100 SHARE (%)

Satisfied Not satisfied Not Responded Total

45% 55% 0.0% 100%

55.00%

45.00%

Satisfied

Not satisfied

INTERPRETATION 45% of the respondents are satisfied with their existing service agent. 55% of the respondents are not satisfied with their existing insurance agent. All of those who have taken a policy have responded.

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 DATA SHOWS NUMBER OF RESPONDENTS PAYING TAX

RESPONSE NO. OF RESPONDENTS 100 100 SHARE (%)

Paying tax Not paying tax Total

100% 0% 100%

0%

100%

Paying tax

Not paying tax

INTERPRETATION Of the sample size of 400 respondents, all the respondents are paying tax.

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 DATA SHOWS RESPONDENTS INVESTMENTS FOR TAX SAVING

INVESTMENTS LIC NSC Bonds PPF PF EPF NO. OF RESPONDENTS 51 33 32 25 21 11 SHARE (%) 51% 33% 32% 25% 21% 11%

11 21

51

25

32

33

LIC

NSC

BOND

PPF

PF

EPF

INTERPRETATION 51% of the respondents save their tax by investing in LIC, which is the highest among all Investment. This shows that most people for getting taxes benefits invest in LIC. 33.25% of the respondents do their tax saving by investing in NSC. 32.25% of the respondents to their tax saving by investing in bonds.

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 DATA SHOWS RESPONDENTS PERCEPTION ABOUT BEST FORM OF INVESTMENT FOR SECURING THEIR FUTURE
NO. OF RESPONDENTS Fixed Assets Bank deposits Jewellery Securities i.e. bonds, MFs Shares Insurance 75 11 25 40. 10 70 SHARE (%) 75% 11% 25% 40% 10% 70%

Fixed Assets 70 75 Bank deposits Cash & Jewellery Securities i.e. bonds, MFs Shares Insurance

10

40

25

11

INTERPRETATION 75.25% of the respondents as with the view that Fixed Assets is the best form of investment for securing their future. 70.5% of the respondents are with the perception that Insurance is the best form of investment for securing their future, which is one of the highest and this shows that insurance is an important key for securing your future.

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 DATA SHOWS WHAT PEOPLE INTENT TO GAIN FROM THEIR INVESTMENT

RESPONSE Saving & Returns Security Tax benefits NO. OF RESPONDENTS 100 90 71. SHARE (%) 100% 90% 71.%

71

100

90

Saving & Returns

Security

Tax benefits

INTERPRETATION 100% of the respondents intent to gain saving and returns from their investment. 90% of the respondents intent to gain security from their investments. Whereas, 71.75% of the respondents intent to gain tax benefits from their investments.

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 DATA GIVES PEOPLES PERCEPTION ON APPROPRIATE AGE FOR BUYING INSURANCE

RESPONSE After 25 years After 35 years After 45 years Anytime NO. OF RESPONDENTS 29 10 0 60 SHARE (%) 29% 10% 0% 60%

29%

60.61% 10.10% 0%

After 25 years

After 35 years

After 45 years

Anytime

INTERPRETATION 29% of the respondents are with the view that insurance should be bought after the age of 25 years. 10.5% of the respondents are with the view that insurance should be buyed after the age of 35 years. Whereas, 60.5% of the respondents are with the view that buying of insurance do not have any thing to do with age i.e. there is no age limitations. It can be purchased any time according to the need.

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 DATA

SHOWS

PEOPLE

OPINION

ABOUT

INDIAN

INSURANCE

COMPANIES
RESPONSE Rigid plans Non user friendly Unsatisfactory services Non Aggressive Satisfactory Good Very good NO. OF RESPONDENTS 67 29 26 35 24 10 0 SHARE (%) 67% 29% 26% 35% 24% 10% 0%

0 24 10 67 33

26

29

Inflexible plans Non Aggressive Very good

Non user friendly Satisfactory

Unsatisfactory services Good

INTERPRETATION 67% of the respondents have the opinion that Indian Insurance Companies have Rigid plans. 29.5% feel that Indian Insurance companies are Non-user friendly.

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26.5% feel that services of Indian Insurance companies are Unsatisfactory. 35.75% of the respondents are with the view that Indian Insurance companies are Non-aggressive.

24% of the respondents feel that products and services of Indian Insurance companies is Satisfactory.

Whereas only 10.25% feel that it is Good enough. And according to the data, no single person has felt that it is very good.

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 DATA SHOWS WHAT PEOPLE WOULD LOOK FOR IN AN INSURANCE COMPANY

RESPONSE A trusted name Friendly service responsiveness Good plans Accessibility & NO. OF RESPONDENTS 82 71 81 49 SHARE (%) 82% 71% 81% 49%

49

82

81

71 A trusted name Friendly service & responsiveness Good plans Accessibility

INTERPRETATION 82% customers look for a Trusted name in a company for insurance. 81.5% customers look for a good plan in a company for insurance. Friendly service & responsiveness and Accessibility are also important factors looked by customers in a company. DATA SHOWS PEOPLE PLANNING FOR NEW INVESTMENTS RESPONSE NO. OF SHARE (%)

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RESPONDENTS Planning Not planning Total 87 13 100 87% 13% 100%

13.0%

87.0%

Planning

Not planning

INTERPRETATION Only 12.5% of the customers contacted are not planning for new investments presently. Whereas, 87.5% of the customers are still planning for new investments this can be a great potential for Reliance Life Insurance to take them on their favor.

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 DATA SHOWS PEOPLE INTERESTED IN GOING FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS
RESPONSE Yes No Uncertain Total NO. OF RESPONDENTS 43 44 13 100 SHARE (%) 43% 44% 13% 100%

13% 43% 44%

Yes

No

Uncertain

INTERPRETATION The interested customers i.e. 43% are ready to go for insurance even away from a city if services and products are worthwhile, which again is a good prospect (potential) for Reliance Life Insurance to take them on their favor.

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CHAPTER VI CONCLUSION

62

CONCLUSION
Our exhaustive research in the field of Life Insurance threw up some interesting trends which can be seen in the above analysis. A general impression that we gathered during Data collection was the immense awareness and knowledge among people about various companies and their insurance products. People are beginning to look beyond LIC for their insurance needs and are willing to trust private players with their hard earned money. People in general have been impression by the marketing and advertising campaigns of insurance companies. A high penetration of print , radio and Television ad campaigns over the years is beginning to have its impact now. The general satisfaction levels among public with regards to policy and agents still requires improvement. But therein lays the opportunity for a relative new comer like ING. LIC has never been known for prompt service or customer oriented methods and Reliance can build on these factors.

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CHAPTER VII SUGGESTION

64

Suggestion
According the survey only 42% people are insured in Alwar so reaming other part is potential for insurance sector. Among that 42% people who having insurance, they have insurance 40% for self 28%for spouse 21% for children and 18% for their parents and 11% for all family member, also its very help full for insurance sector so they should take necessary step for capture this potential. Only 42% people having insurance in Alwar in that 42% there are 82 % people are under insured and other 18% people are fully insured according to their income so that is also plus point for insurance sector to capture the market

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CHAPTER IX BIBLIOGRAPHY

66

BIBLIOGRAPHY

1.

BOOKS/MAGAZINES REFFERED: STUDY GUIDEPRINCILES & PRACTICES OF LIFE /

GENERALINSURANCE, by AIMA. Books published by INSURANCE INSTITUTE OF INDIA LIFE-INSURANCE, by Mc GILL INSURANCEWATCH. MONEYOUTLOOK. 2. WEBSITES REFFERED: WWW.RELIANCELIFE.CO.IN WWW.CIFAINSURANCE.COM WWW.MONEYOUTLOOK.COM WWW.INSURANCE.IND.COM 3. REPORTS/ARTICLES REFFERED: REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY. Dec2005. BRIEF PROFILE OF LIC, INDIADec 2006. REPORT: COPING WITH COMPETITIONJan2007

67

CHAPTER VIII QUESTIONNAIRE

68

QUESTIONNAIRE 1. ARE YOU EMPLOYED? YES NO If YES, only then proceed 2. DO YOU HAVE ANY INSURANCE POLICY? YES NO WHICH INSURANCE POLICY DO YOU HAVE? LIFE 4. NON-LIFE BOTH

3.

WHICH COS INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM) a) LIC b) ICICIPRUDENTIAL c) SBI LIFE INSURANCE d) ING VYSYA LIFE e) RELIANCE LIFE INSURANCE f) TATA AIG LIFE g) ANY OTHER ________( Specify)

5.

FOR HOW MANY YEARS DO YOU HAVE INSURANCE POLICY? (Please Tick) a) <5Yrs b) 5-10 Yrs c) 10-15 Yrs d) Any Other______ (Specify)

6.

WHAT DO YOU THINK ARE THE BENEFITS OF INSURANCE COVER? (RANK THEM) a) COVER FUTURE UNCERTAINITY b) TAX DEDUCTIONS c) FUTURE INVESTMENT d) ANY OTHER _________ (Specify)

69

7.

WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT? (RANK THEM) a) LOW PREMIUM b) LARGER RISK COVERANCE c) MONEY BACK GUARNTEE d) REPUTATION OF COMPANY e) EASY ACCESS TO AGENTS f) ANY OTHER _________ (Specify)

8.

YOUR MONTHLY INCOME? a)<4k b)4k-8k c)8k-12k d)12k-16k e)Other_____(Specify)

9.

DO YOU REALLY THINK INSURANCE POLICY COVER IN TODAYS SCENARIO IS NOT ESSENTIAL? _____________________________________________________

10.

WHATS YOUR PERCEPTION ABOUT INSURANCE? (RANK THEM) a) A SAVING TOOL b) A TAX SAVING DEVICE c) A TOOL TO PROTECT FUTURE

11.

HOW HAS/WOULD YOU BOUGHT/BUY AN INSURANCE? a) CUSTOMER APPROCHED INSURANCE COs b) INSURANCE COs APPROCHED CUSTOMER

12.

ARE YOU SATISFIED WITH THE POLICY? a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING

70

13.

ARE YOU SATISFIED WITH THE SERVICE AGENT? a) SATISFIED SAVING TOOL b) NOT SATISFIED c) NOT RESPONDING

14

DO YOU PAY TAXES? YES NO

15.

WHERE HAVE YOU INVESTED FOR TAX SAVING? (RANK THEM) a) LIC b) NSC c) BONDS d) PPF e) PF f) EPF

16.WHICH IS THE BEST FORM OF INVESTMENTS? (RANK THEM) a) FIXED ASSETS b) BANK DEPOSITS c) JEWELLERY d) SECURITIES, i.e. Bonds, MFs e) SHARES f) INSURANCE

71

17. WHAT DO YOU INTENT TO GAIN FROM INVESTMENTS? a) SAVING & RETURNS b) SECURITY c) TAX BENIFITS 18. WHATS THE RIGHT AGE TO BUY INSURANCE? a) AFTER 25 Yrs b) AFTER 35 Yrs c) AFTER 45 Yrs d) ANYTIME

19.HOW WOULD YOU RATE INDIAN INSURANCE COs? a) RIGID PLANS b) NON-USER FRIENDLY c) UNSATISFATORY SREVICES d) NON-AGGRESSIVE e) SATISFACTORY f) GOOD g) VERY GOOD

72

20. ARE YOU PLANNING FOR NEW INVESTMENTS?

PLANNING

NOT PLANING

21. WOULD YOU GO FOR INSURANCE IF A SERVICE PROVIDER AWAY FROM THE CITY OFFERS BETTER SERVICE & PRODUCTS?

a) YES b) NO c) UNCERTAIN

THANK YOU

NAME:_________________________ ADDRESS:______________________ ______________________________ OCCUPATION:___________________

73

THANK YOU

74