Ltd with
Mutual Fund
A Project Report submitted to the SRM University in partial fulfilment of the requirements
for the award of the Degree of
MASTER OF BUSINESS ADMINISTRATION
Submitted by
Jim John Thomas (Reg No. 3511220017)
Company Certificate
DECLARATION
I, Jim John Thomas, hereby declare that the project Report, entitled A Study on customer
perception of ULIP of Bajaj Allianz Life Insurance Co. Ltd with Mutual Fund
submitted to the SRM University in partial fulfilment of the requirements for the award of
the Degree of Master of Business Administration is a record of original work undergone by
me during the period 03.3.2014 to 30.4.2014 under the supervision and guidance of (Mrs.
Mary Auxilia, Asst Prof) SRM RAMAPURAM B-SCHOOL, SRM University, Ramapuram
Campus and it has not formed the basis for the award of any Degree/Fellowship or other
similar title to any candidate of any University.
Place: Chennai 89
Date:
Signature of Guide
(Mrs. Mary Auxilia, Asst Prof)
SRM RAMAPURAM B-SCHOOL
SRM University
Ramapuram Campus
Chennai 89.
Countersigned
INTERNAL EXAMINER
EXTERNAL EXAMINER
ACKNOWLEDGEMENT
Table of contents
Chapter 1 Introduction
1.1 Outline of the project
1.1.1 Need and importance of the study
1.1.2 Scope of the study
1.1.3 Problem definition
1.1.4 Objectives of the study
1.1.5 Research methodology
-Research Design
-Sampling Design
-Population
-Sample size
-Sampling Method
-Pilot Study
-Sources of Data
-Data collection Method
-Primary Data
-Secondary Data
-Tools for analysis
1.1.6 Limitations of the study
1.1.7 chapterisation
1.2 Industry profile
1.3 company profile
1.4 Product profile
6
CHAPTER II
Review of literature
CHAPTER III Data analysis and interpretation
Tables, charts with inference
Statistical tools
CHAPTER IV
Summary and Conclusion
4.1 Findings
4.2 Suggestions
4.3 Conclusion
APPENDICES
REFERENCES/ BIBILIOGRAPHY
LIST OF TABLES
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investment decisions
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investment decisions
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LIST OF CHARTS
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investment decisions
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investment decisions
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11
CHAPTER I
INTRODUCTION
12
To make comparison of ULIP plans with Mutual funds in Bajaj Allianz Life Insurance Co.
Ltd. and to Create awareness about Unit Linked Insurance Plan (ULIP) Benefits. The overall
goal of this project was to create awareness about investments. The Above problem arises
because every life insurance company has their products having different positive and
negative aspects.
Life Insurance is booming sector in todays economy. So the responsibilities of the insurance
companies have been increased as compare to the past. Because in past people were taking
insurance policies for protection tool only. In present scenario insurance sector is providing
more services with the basic life insurance. Bajaj Allianz Life Insurance has number of
products, which gives the right way to save the money and earn good profit by invested
premium. Today people want more services and more return on their investment. So this
insurance company is providing more value added services with the basic insurance
operation.
By doing this type of study in this Insurance sector and looking at the vast scope and
opportunity to study this booming field of Life Insurance and the growing awareness among
the public regarding insuring their life through Life insurance policies as well as the growing
contribution of Insurance in GDP of country with the number of private players making
entrance in this booming industry of Insurance.
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities. The income earned through these investments and
the capital appreciations realized are shared by its unit holders in proportion to the number of
units owned by them. Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low cost.
13
14
15
The study compares customer preferences among the two investment avenues:
ULIPs and Mutual Funds.
This research aims to measure the popularity of the brand Bajaj Allianz and its
appeal to the customers.
The study also aims to measure the existing services being offered and will
look at avenues of development to increase the market share of the company.
To understand the reason why customers prefer ULIP as one of the best insurance
investment mode as compared to a mutual fund.
To find the investment preferences of customers from different income levels, age,
sex, etc. in order to arrive at a pattern.
Research Statement:
The research statement studied is entitled, A study on customer perception of ULIP of
Bajaj Allianz Life Insurance Co. Ltd with Mutual Fund.
16
1,00,000
-Sample size:
100
-Sampling Method:
-Pilot Study:
secondary sources
-Sources of Data
-Data collection Method
-Primary Data: Questionnaire
-Secondary Data:
17
The middle class people do not know basic concept of ULIP so creating awareness is
a big challenge.
1.1.7 Chapterization:
Chapter 1 Introduction
Conceptual Framework
Industry/Company Profile
Problem Formulation
Research Design
Sampling Framework
Recommendations
Conclusions
18
19
20
Some of the important milestones in the general insurance business in India are:
1907:
The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance of India.
1957 :
General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968 :
The Insurance Act amended to regulate investments and set minimum solvency margins
and the Tariff Advisory Committee set up.
1972 :
The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and
grouped into four companies viz. the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India
Insurance Company Ltd. GIC incorporated as a company.
1993: Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N.
Malhotra- was formed to evaluate the Indian insurance industry and recommend its future
direction. The Malhotra committee was set up with the objective of complementing the
reforms initiated in the financial sector.
1997 : Insurance regulator IRDA set up.
2000: IRDA starts giving licenses to private insurers:Kotak Life Insurance ,ICICI potential
and HDFC standard Life insurance are the first private insurers to sell a policy.
2001: Royal Sundaram Alliance first non life insurer to sell a policy 2002 Banks allowed to
sell insurance plans.
21
22
Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported
growth of 80%, moving from the 11th position to 9th. It captured a market share of 1.19% in
2007-08. Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from
9th last year. It has presence in more than 3,000 locations across India via 221 branches and
close to 40 banc assurance partnerships. Aviva Life Insurance plans to increase its capital
base by Rs 344 crore.
BOOMING INSURANCE MARKET IN INDIA
With a huge population base and large untapped market, insurance industry is a big
opportunity area in India for national as well as foreign investors. India is the fifth largest life
insurance market in the emerging insurance economies globally and is growing at 32-34%
annually. This impressive growth in the market has been driven by liberalization, with new
players significantly enhancing product awareness and promoting consumer education and
information. The strong growth potential of the country has also made international players to
look at the Indian insurance market. Moreover, saturation of insurance markets in many
developed economies has made the Indian market more attractive for international insurance
players
This research report will help the client to analyze the leading-edge opportunities critical to
the success of insurance industry in India. Based on this analysis, the report gives a future
forecast of the market that is intended as a rough guide to the direction in which the market is
likely
to
move.
Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by 2010-11.
Total non-life insurance premium is expected to increase at a CAGR of 25% for the
period spanning from 2008-09 to 2010-11.
With the entry of several low-cost airlines, along with fleet expansion by existing
ones and increasing corporate aircraft ownership, the Indian aviation insurance market
is all set to boom in a big way in coming years.
Health insurance is poised to become the second largest business for non-life insurers
after motor insurance in next three years.
23
24
Rs. 1,00,000 premiums paid for taxable income below Rs 8,50,000 and
Proceeds from ULIPs are tax-free under section 10(10D) unlike those from a mutual fund
which attract short term capital gains tax.
Key features
Premiums paid can be single, regular or variable. The payment period too can be regular or
variable. The risk cover (insurance cover) can be increased or decreased.As in all insurance
policies, the risk charge (mortality rate) varies with age. However, for an individual the risk
25
charge is always based on the age of the policyholder in the year of commencement of the
policy. These charges are normally deducted on a monthly basis from the unit value. For
instance, if there is an increase in the value of units due to market conditions, the sum at risk
(sum assured less the value of investments) reduces and so the risk charges are lower. The
maturity benefit is not typically a fixed amount and the maturity period can be advanced
(early withdrawal) or extended.
Investments can be made in gilt funds (government securities), balanced funds (part debt, part
equity), money-market funds; growth funds (equities) or bonds (corporate bonds).
The policyholder can switch between schemes (for instance, balanced to debt or gilt to
equity). The investment risk is transferred to the policyholder.The maturity benefit is the net
asset value of the units. The value would be high or low depending on the market conditions
during the period of the policy and the performance of the fund manager.
Thus there is no capital protection on maturity unless the scheme specially provides for it.
There could be policies that allow the policyholder to remain invested beyond the maturity
period in the event of the maturity value not being satisfactory.
POINTS TO REMEMBER ABOUT ULIP
First-year charges: Usually, a minimum of 15 per cent. However, high premiums attract
lower charges and vice versa. Charges can be as high as 70 per cent if the scheme affords a
lot of flexibility. Subsequent charges: Usually lower than first-year charges. However, some
insurers charge higher fees in the initial years and lower them significantly in the subsequent
years.
Administration charges: This ranges between Rs 15 per month to Rs 60 per month and is
levied by cancellation of units and also depends on the nature of the scheme.
Risk charges: The charges are broadly comparable across insurers.
Asset management fees: Fund management charges vary from 0.6 per cent to 0.75 per cent
for a money market fund, and around 1.5 per cent for an equity-oriented scheme. Fund
management expenses and the brokerage are built into the daily net asset value.
Switching charges: Some insurers allow four free switches in every year but link it to a
minimum amount. Others allow just one free switch in each year and charge Rs 100 for every
subsequent switch. Some insurers don't charge anything.
26
Top-ups: Usually attracts 1 per cent of the top-up amount. Top-up normally goes directly
into your investment account (units) unless you specifically ask for an increase in the risk
cover.
Surrender value of units: Insurers levy certain charges if the policy is surrendered
prematurely. This levy varies between insurers and could be around 75 per cent in the first
year, 60 per cent in the second year, 40 per cent in the third year and nil after the fourth year.
Fund performance: You could check out the performance of similar schemes (balanced with
balanced; equity with equity) across insurance companies.
Look at NAV performance over a period of at least two to three years. This can only give you
some indication about the credibility of the fund manager because past performance is no
guarantee to future returns, especially in insurance products where the emphasis is on longterm performance (10 years or more).
Since insurance is a product, which entails a long-term commitment on the part of the insurer,
it is important not to go only by the features or the cost advantages of schemes but by the
parentage of the insurer as well.
Comparing schemes based on costs is a fairly complex exercise. As a rule, the higher the
initial years' expenses the longer it takes for the policy to outperform its peers with low initial
years' costs and slightly higher subsequent year expenses.
Retire unhurt
Pension plans are essentially tailored to meet old age financial requirements. But there are
certain advantages in joining a pension plan.
First of all, contribution to pension funds upto Rs 10,000 is eligible for tax deduction under
section 80CCC. In other words, your pension contribution will get deducted from your
taxable income.
So if you are in the top tax bracket, liable to pay to a 30.6 per cent tax, then your tax savings
will be that much.
All life insurance companies offer pension products - both conventional and unit-linked. In
both cases you pay a certain premium amount for a specified length of time.
Usually, the minimum entry age is 18 years and the maximum age is 60 years. You can
choose to pay the premium for five to 30 years. When the policy matures, you receive onethird of the value of the accumulated amount as a lump-sum payment.
27
For the remaining, you can buy annuities either from the existing insurer or any other insurer.
While in a conventional scheme, your money is managed through the insurer's pooled
investment account and you are entitled to bonuses every year, in a ULIP you receive the
value of the investment in your individual account.
In a ULIP you have the flexibility to choose between a conservative scheme or an aggressive
scheme with high allocation to equities. Pension policy imposes huge penalties for early
termination.
Assuming the growth rate in the market value of units is 6 per cent per annum, the value of
investment would be Rs 510,200.
However, his family will get Rs 532,000 as it is the sum assured.
Assuming a growth rate of 10 per cent per annum, the value of units at the end of the ninth
year would be Rs 621,900. Hence, the beneficiaries would get Rs 621,900.
ADVANTAGES OF ULIP
Can easily rebalance your risk between equity and debt without any tax implications.
Best suited for medium risk taking individuals who wish to invest in equity and debt
funds (at least 40% or higher exposure to debt). No additional tax burden for those
investing mainly in debt unlike in MFs.
29
Mutual Fund:
INTRODUCTION TO MUTUAL FUNDS:
A mutual fund is simply a financial intermediary that allows a group of investors to pool their
money together with a predetermined investment objective. The mutual fund will have a fund
manager who is responsible for investing the pooled money into specific securities (usually
stocks or bonds). When you invest in a mutual fund, you are buying shares (or portions) of
the
mutual
fund
and
become
shareholder
of
the
fund.
Mutual funds are one of the best investments ever created because they are very cost efficient
and very easy to invest in (you don't have to figure out which stocks or bonds to buy).
By pooling money together in a mutual fund, investors can purchase stocks or bonds with
much lower trading costs than if they tried to do it on their own. But the biggest advantage to
mutual funds is diversification.
ACCORDING TO AMFI (ASSOCIATION OF MUTUAL FUND OF INDIA):
A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such
as shares, debentures and other securities. The income earned through these investments and
the capital appreciation realized is shared by its unit holders in proportion to the number of
units owned by them.
Thus a Mutual Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of securities at a
relatively low cost. The flow chart below describes broadly the working of a mutual fund.
30
31
4. Return Potential: Over a medium to longterm, Mutual Funds have the potential to provide
a higher return as they invest in a diversified basket of selected securities.
5. LowCosts: Mutual Funds are a relatively less expensive way to invest compared to
directly investing in the capital markets because the benefits of scale in brokerage, custodial
and other fees translate into lower costs for investors.
6. Liquidity: In open-ended schemes, you can get your money back promptly at AssetValue
(NAV) related prices from the Mutual Fund itself.With close-ended schemes, you can sell
your units on a stock exchange at the prevailing market price or avail of the facility of
repurchase through Mutual Funds at NAV related prices which some close-ended and interval
schemes offer you periodically.
7. Transparency: You get regular information on the value of your investment in addition to
disclosure on the specific investments made by your scheme, the proportion invested in each
class of assets and the fund managers investment strategy and outlook.
8. Flexibility: Through features such as Systematic Investment Plans (SIP), Systematic
Withdrawal Plans (SWP) and dividend reinvestment plans, you can systematically invest or
withdraw funds according to your needs and convenience.
9. Choice of Schemes: Mutual Funds offer a variety of schemes to suit your varying needs
over a lifetime.
10. Well Regulated: All Mutual Funds are registered with SEBI and they function within the
provisions of strict regulations designed to protect the interests of investors.The operations
of Mutual Funds are regularly monitored by SEBI.
32
No Guarantees: No investment is risk free. If the entire stock market declines in value, the
value of mutual fund shares will go down as well, no matter how balanced the portfolio.
Investors encounter fewer risks when they invest in mutual funds than when they buy and sell
stocks on their own. However, anyone who invests through a mutual fund runs the risk of
losing money.
Fees and commissions: All funds charge administrative fees to cover their day-to-day
expenses. Some funds also charge sales commissions or "loads" to compensate brokers,
financial consultants, or financial planners. Even if you don't use a broker or other financial
adviser, you will pay a sales commission if you buy shares in a Load Fund.
Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to
70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you
will pay taxes on the income you receive, even if you reinvest the money you made.
Management risk: When you invest in a mutual fund, you depend on the fund's manager to
make the right decisions regarding the fund's portfolio. If the manager does not perform as
well as you had hoped, you might not make as much money on your investment as you
expected. Of course, if you invest in Index Funds, you forego management risk, because
these funds do not employ managers.
A measurement of an option position or premium in relation to the underlying instrument. In
mutual fund also there is certain amount of risk-return factor associated according to the
investment option these are as follows,
RISK
RETURN
Equity
High
High
Balanced
Medium
Medium
Debt
Low
Low
33
34
III. Tax-exempt vs. Non-Tax exempt Funds: Generally, when a fund invests in tax-exempt
securities, it is called a tax-exempt fund. In India, after the 1999 Union Government Budget,
all of the dividend income received from any of the mutual funds is tax-free in the hands of
the investors. However, funds other than Equity Funds have to pay a distribution tax, before
distributing income to investors. In other words, equity mutual fund schemes are tax-exempt
investment avenues, while other funds are taxable for distributable income.
35
Fixed Term Plan Series Another Indian Variant: These are essentially closed-end.
These plans do not generally offer guaranteed returns. This scheme is for short-term investors
who otherwise place money as fixed term bank deposits or inter corporate bonds.
Equity Fund: As investors move from Debt Fund category to Equity Funds,
they face increased risk level.
No guarantee returns
b) Growth Fund
c) Specialty Fund
They invest in companies that meet predefined criteria.
i) Sector Funds
Technology Fund
Pharmaceutical Fund
FMCG Fund
Hybrid Funds Quasi Equity/Quasi Debt: Many mutual funds mix these (money
market, debt and equity) different types of securities in their portfolios. Such funds
are termed hybrid funds as they have a dual equity/bond focus.
38
Real Estate Funds: Specialized Real Estate Funds would invest in Real Estate
directly, or may fund real estate developers, or lend to them, or buy shares of housing
finance companies or may even buy their securities assets.
Following are the different products and services Offered by Mutual Fund Companies
Balanced Funds
Gilt Funds
Index Funds
Sectoral Funds
Thematic Funds
Commodity Funds
Hybrid Funds
39
There are several ways for investment and disinvestments in mutual funds such as :
Value Averaging
Growth fund
Provide capital appreciation over the medium to long-term
Investor who does not require periodic income distribution can choose the option,
where the incomes earned are retained in the investment portfolio and allowed to
grow, rather than being distributed to investors.
Investors with longer investment horizons and limited requirements for income
choose this option.
The return to the investor who chooses a growth option is the rate at which his
initial investment has grown over a period for which he has invested in the fund.
The investor choosing this option will vary the NAV with the value of the
investments portfolio , while the no. of units held with remains constant.
40
Income fund
Provide regular and steady income to investor
Balanced fund
Provide both growth and regular income.
reinvestment.
The value of units will be similar to that under the dividend option
There are four types of plans as follows
41
Dividend option
Investors will receive dividends from the mutual fund , as an and when
dividends are declared.
Dividends are paid in the form of warrants or are directly credited to the
investors bank accounts.
Investors choosing this option have a fixed no. of units invested in the fund and
earned incomes on this investment.
The NAV of this investors holding will vary with changes in the value of
portfolio and the impact of the proportion of income earned by the fund to what
is actually distributed as dividend.
42
REGULATORS IN INDIA
SEBI - The capital markets regulators also regulates the mutual funds in India. SEBI
requires all mutual funds to be registered with them. SEBI issues guidelines for all
mutual funds operations - investment, accounts, expenses etc.
RBI as supervisor of banks owned mutual funds - As banks in India came under the
regulatory jurisdiction of RBI, bank owned funds to be under supervision of RBI and
SEBI.
Recently, it has been decided that Money Market Mutual Funds of registered mutual funds
will be regulated by SEBI through SEBI (Mutual Fund) Regulations 1996.
Unit Linked Insurance Policies (ULIPs) as an investment avenue are closest to mutual funds
in terms of their structure and functioning. As is the cases with mutual funds, investors in
ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared
for the same on a daily basis.
Similarly ULIP investors have the option of investing across various schemes similar to the
ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt
funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with
an insurance component.
However it should not be construed that barring the insurance element there is nothing
differentiating mutual funds from ULIPs
43
2. Expenses
In mutual fund investments, expenses charged for various activities like fund management,
sales and marketing, administration among others are subject to pre-determined upper limits
as prescribed by the Securities and Exchange Board of India.
For example equity-oriented funds can charge their investors a maximum of 2.5% per annum
on a recurring basis for all their expenses; any expense above the prescribed limit is borne by
the fund house and not the investors.
44
Similarly funds also charge their investors entry and exit loads (in most cases, either is
applicable). Entry loads are charged at the timing of making an investment while the exit load
is charged at the time of sale.
Insurance companies have a free hand in levying expenses on their ULIP products with no
upper limits being prescribed by the regulator, i.e. the Insurance Regulatory and
Development Authority. This explains the complex and at times 'unwieldy' expense structures
on ULIP offerings. The only restraint placed is that insurers are required to notify the
regulator of all the expenses that will be charged on their ULIP offerings.
Expenses can have far-reaching consequences on investors since higher expenses translate
into lower amounts being invested and a smaller corpus being accumulated.
3. Portfolio disclosure
Mutual fund houses are required to statutorily declare their portfolios on a quarterly basis,
albeit most fund houses do so on a monthly basis. Investors get the opportunity to see where
their monies are being invested and how they have been managed by studying the portfolio.
There is lack of consensus on whether ULIPs are required to disclose their portfolios. During
our
interactions with leading insurers we came across divergent views on this issue.
While one school of thought believes that disclosing portfolios on a quarterly basis is
mandatory, the other believes that there is no legal obligation to do so and that insurers are
required to disclose their portfolios only on demand.
45
If a mutual fund investor in a diversified equity fund wishes to shift his corpus into a debt
from the same fund house, he could have to bear an exit load and/or entry load.
On the other hand most insurance companies permit their ULIP inventors to shift investments
across various plans/asset classes either at a nominal or no cost (usually, a couple of switches
are allowed free of charge every year and a cost has to be borne for additional switches).
Effectively the ULIP investor is given the option to invest across asset classes as per his
convenience in a cost-effective manner.
This can prove to be very useful for investors, for example in a bull market when the ULIP
investor's equity component has appreciated, he can book profits by simply transferring the
requisite amount to a debt-oriented plan.
46
5. Tax benefits
ULIP investments qualify for deductions under Section 80C of the Income Tax Act. This
holds good, irrespective of the nature of the plan chosen by the investor. On the other hand in
the mutual funds domain, only investments in tax-saving funds (also referred to as equitylinked savings schemes) are eligible for Section 80C benefits.
Maturity proceeds from ULIPs are tax free. In case of equity-oriented funds (for example
diversified equity funds, balanced funds), if the investments are held for a period over 12
months, the gains are tax free; conversely investments sold within a 12-month period attract
short-term capital gains tax @ 10%.
Similarly, debt-oriented funds attract a long-term capital gains tax @ 10%, while a short-term
capital gain is taxed at the investor's marginal tax rate.
Despite the seemingly similar structures evidently both mutual funds and ULIPs have their
unique set of advantages to offer. As always, it is vital for investors to be aware of the
nuances in both offerings and make informed decisions.
47
CHAPTER II
REVIEW OF LITERATURE
Mr.Madhu T, made a study on ULIPs hold edge over mutual funds.The findings shows
that
distributors would push unit linked insurance plans (ULIPs) to earn better
Mr.Murthaza and Sony, in their article An Overview on ULIP, This article is an initiative from
Bajaj Allianz to create better understanding of ULIPs and its benefits so that investors can
avail maximum returns from their investments.
Mr.Bernz Jayma P, made a study on Mutual Fund disadvantages. He suggested that ,If
you're new to stock market investing you may have heard that mutual funds would be a good
way for you to get started. That's actually good advice, but mutual funds have their own
pitfalls to watch out for.
48
CHAPTER III
DATA ANALYSIS AND INTERPRETATION
(A) Comparison of customers based on their Gender:
Gender
Cumulative
Frequency Percent Valid Percent
Valid
Percent
Male
74.0
74.0
74.0
74.0
Female
26.0
26.0
26.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
The above graph shows that, out of 100 customers, 74% of the respondents are male policy
holders and the rest 26% are female policy holders.
49
Marital
Cumulative
Frequency Percent Valid Percent
Valid Married
Unmarried
Total
Percent
66.0
66.0
66.0
66.0
34.0
34.0
34.0
100.0
100.0
100.0
100.0
INTERPRETATION:
From a sample of 100 customers, 66% of the policy holders are unmarried and the rest 34%
of the policy holders are married.
50
Percent
Valid Percent
Percent
20-30
12.0
12.0
12.0
12.0
30-40
28.0
28.0
28.0
40.0
40-50
34.0
34.0
34.0
74.0
50-60
22.0
22.0
22.0
96.0
60-70
4.0
4.0
4.0
100.0
Total
100.0
100.0
100.0
INTERPRETATION:
The graph shows that majority of the sample respondents were in the age group of 40-50 yrs
ie,34%, 12% were in the age group of 20-30 yrs & 28% of them were 30-40 yrs, 22% were in
the age group of 50-60 yrs and 4% were in the age group of 60-70 yrs.
51
(D) Occupation:
Occupation
Cumulative
Frequency Percent Valid Percent
Valid Government
Percent
36.0
36.0
36.0
36.0
Private service
28.0
28.0
28.0
64.0
Business
22.0
22.0
22.0
86.0
NRIs
6.0
6.0
6.0
92.0
Others
8.0
8.0
8.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
The graph shows that majority of the policy holders are working in the Government sector
i.e.36% , 28% of them are engaged in Private service, 22% of them are business field, 6% of
them are NRIs and 8% of them are engaged other works.
52
Frequency Percent
Valid Below 2
Valid
Cumulative
Percent
Percent
38.0
38.0
38.0
38.0
2-4 lakhs
46.0
46.0
46.0
84.0
4-6 lakhs
12.0
12.0
12.0
96.0
6-8 lakhs
4.0
4.0
4.0
100.0
100.0
100.0
100.0
lakhs
Total
INTERPRETATION:
The graph shows that 46% of the policy holders get a salary of 2-4 lakhs, 38% of the policy
holders get a salary of below 2 lakhs, 12% of the policy holders get a salary of 4-6 lakhs, 3 of
the policy holders get a salary below 2 lakhs and 4% of them above 6-8 lakhs.
53
(i)
Percent
10.0
10.0
10.0
10.0
4.0
4.0
4.0
14.0
Brokers/Agent
54.0
54.0
54.0
68.0
Friends
26.0
26.0
26.0
94.0
6.0
6.0
6.0
100.0
100.0
100.0
100.0
journal
Television
Consultants
Total
INTERPRETATION:
From the sample of 100 customers, 54% of the customers are strongly agree that the agents or
brokers helps them to make investment decision, 26% of the customers point out their friends
take part in the investment decision. And 10% customers reveal that the financial journals
help them, Remaining 6% is from consultants, and 4% selects television as the source.
54
(ii)
Attractive schemes
Tax benefits
High reputation
Rate of return
Variety of products
Total
Percent
Valid Percent
Percent
4.0
4.0
4.0
4.0
54.0
54.0
54.0
58.0
6.0
6.0
6.0
64.0
28.0
28.0
28.0
92.0
8.0
8.0
8.0
100.0
100.0
100.0
100.0
INTERPRETATION:
54% customers agree that the tax benefit is influence them to buy policy ,28% looks the rate of
return what they will earn, variety of products from the company attracts 8% customers, and high
reputation of the company attracts 6% of the customers, and remaining 4% pointing out the
attractive schemes.
55
(iii)
Valid Insurance
Percent
26.0
26.0
26.0
26.0
Stock market
2.0
2.0
2.0
28.0
Mutual fund
12.0
12.0
12.0
40.0
Bank deposit
56.0
56.0
56.0
96.0
4.0
4.0
4.0
100.0
100.0
100.0
100.0
INTERPRETATION:
From a sample of 100 customers, 56% of the customers invest money in bank deposit, 26% in
insurance sector,12% in mutual fund, then 4% in both insurance and mutual fund and
remaining 2% in stock market.
56
(iv)
Percent
54.0
54.0
54.0
54.0
10.0
10.0
10.0
64.0
Tata AIG
8.0
8.0
8.0
72.0
Aviva Life
6.0
6.0
6.0
78.0
22.0
22.0
22.0
100.0
100.0
100.0
100.0
HDFC Standard
life
SBI Life
Total
INTERPRETATION:
From a sample of 100 customers, 54% customers select Bajaj Allianz is the best insurance
company, and 22% customers choose SBI Life, 10% select HDFC, 8% for Tata AIG and
remaining 6% stands for Aviva Life Insurance Company.
57
(v)
Percent
4.0
4.0
4.0
4.0
Good
74.0
74.0
74.0
78.0
Fair
18.0
18.0
18.0
96.0
Poor
4.0
4.0
4.0
100.0
Total
100.0
100.0
100.0
INTERPRETATION:
From a sample of 100 customers,74% customers thinks that the products offered by Bajaj
Allianz Life insurance co. is good,4% thinks its excellent,18% of them select Bajaj Allianz
products are fair, and remaining 4% not satisfied with our products.
58
(vi)
Percent
4.0
4.0
4.0
4.0
Agree
66.0
66.0
66.0
70.0
Neutral
16.0
16.0
16.0
86.0
Disagree
10.0
10.0
10.0
96.0
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers, 66% agree, 4% of them strongly supporting that fact, and
16% has no opinion about it. And 4% strongly disagreed; remaining 10% also disagree with
investment in ULIP.
59
(vii)
Percent
28.0
28.0
28.0
28.0
Agree
64.0
64.0
64.0
92.0
Neutral
4.0
4.0
4.0
96.0
Disagree
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, 64% of the customers agree, 28% of them strongly support
it, 4% customers didnt say anything, and remaining 4% disagree with that fact. So we can
see that most of the Customers choose ULIP because of insurance coverage.
60
Percent
6.0
6.0
6.0
6.0
Agree
26.0
26.0
26.0
32.0
Neutral
28.0
28.0
28.0
60.0
Dsagree
36.0
36.0
36.0
96.0
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers,26% of the customers agree with that fact,6% of the
customers strongly support it,and 28% customers have no idea about it.And remaining 10%
disagreed,out of this 10%, 4% strongly disagreed with it.
61
(ix)
Percent
34.0
34.0
34.0
34.0
Agree
54.0
54.0
54.0
88.0
Neutral
8.0
8.0
8.0
96.0
disagree
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers,54% of the customers thinks that mutual funds are more
risky than ULIP products,34% strongly agree with this statement.8% customers have no
opinion about it,and remaining 4% disagree with it.
62
(x)
Percent
24.0
24.0
24.0
24.0
Agree
62.0
62.0
62.0
86.0
Neutral
10.0
10.0
10.0
96.0
Disagree
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
62% of the customers agree with ULIP have advantage over mutual fund statement.24%
customers strongly agree with this fact. And 4% of customers are not supporting the
statement. And remaining 10% have no opinion about it.
63
(xi)
Percent
8.0
8.0
8.0
8.0
Agree
52.0
52.0
52.0
60.0
Neutral
4.0
4.0
4.0
64.0
Disagree
30.0
30.0
30.0
94.0
6.0
6.0
6.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers,52% customers agree,8% strongly agree,30% customers
were disagree with that fact,6% strongly disagree, and remaining 4% have no opinion about
safety factor is important in the investment of ULIP.
64
(xii)
Percent
6.0
6.0
6.0
6.0
Agree
10.0
10.0
10.0
16.0
Neutral
10.0
10.0
10.0
26.0
Disagree
60.0
60.0
60.0
86.0
Strongly disagree
14.0
14.0
14.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, majority of the customers disagree i.e. 60%, 14% strongly
disagree with that fact. And 6% strongly agree,10% agree,and remaining 10% neither agree
nor disagree with that statement.
65
Percent
12.0
12.0
12.0
12.0
Agree
42.0
42.0
42.0
54.0
Neutral
6.0
6.0
6.0
60.0
Disagree
24.0
24.0
24.0
84.0
Strongly disagree
16.0
16.0
16.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, majority of the customers agree i.e. 42%, 12% strongly
agree with that fact. And 24% disagree,16% strongly disagree, and remaining 6% neither
agree nor disagree with that statement.
66
(xiv)
Percent
12.0
12.0
12.0
12.0
Agree
42.0
42.0
42.0
54.0
Neutral
10.0
10.0
10.0
64.0
Disagree
32.0
32.0
32.0
96.0
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers, majority of the customers agree i.e. 42%, 12% strongly
agree with that fact. And 32% disagree,4% strongly disagree, and remaining 10% neither
agree nor disagree with that statement
67
(xv)
Percent
16.0
16.0
16.0
16.0
Agree
16.0
16.0
16.0
32.0
Neutral
14.0
14.0
14.0
46.0
Disagree
46.0
46.0
46.0
92.0
8.0
8.0
8.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers, majority of the customers disagree i.e. 46%, 8% strongly
disagree with that fact. And 16% strongly agree,16% agree, and remaining 14% neither agree
nor disagree with that statement.
68
(xvi)
Percent
18.0
18.0
18.0
18.0
Agree
22.0
22.0
22.0
40.0
Neutral
38.0
38.0
38.0
78.0
Disagree
10.0
10.0
10.0
88.0
Strongly disagree
12.0
12.0
12.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, 22%agree, 18% strongly agree with that fact. And 10%
disagree, 12% strongly disagree, and remaining 38% neither agree nor disagree with that
statement.
69
Percent
4.0
4.0
4.0
4.0
Agree
8.0
8.0
8.0
12.0
Neutral
16.0
16.0
16.0
28.0
Disagree
60.0
60.0
60.0
88.0
Strongly disagree
12.0
12.0
12.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers,8% customers agree,4% strongly agree,60% customers were
disagree with that fact 12% strongly disagree, and remaining 16% have no opinion about
safety factor is important in the investment of mutual fund.
70
Percent
14.0
14.0
14.0
14.0
Agree
38.0
38.0
38.0
52.0
Neutral
30.0
30.0
30.0
82.0
Disagree
12.0
12.0
12.0
94.0
6.0
6.0
6.0
100.0
100.0
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers, majority of the customers agree i.e. 38%, 14% strongly
agree with that fact. And 12% disagree,6% strongly disagree, and remaining 30% neither
agree nor disagree with that statement.
71
(xix)
Percent
4.0
4.0
4.0
4.0
Agree
14.0
14.0
14.0
18.0
Neutral
42.0
42.0
42.0
60.0
Disagree
30.0
30.0
30.0
90.0
Strongly disagree
10.0
10.0
10.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, 30% disagree, 10% strongly disagree with that fact. And
14% agree,4% strongly agree, and remaining 42% neither agree nor disagree with that
statement.
72
(xx)
Percent
6.0
6.0
6.0
Agree
12.0
12.0
18.0
Neutral
23
46.0
46.0
64.0
Disagree
12
24.0
24.0
88.0
12.0
12.0
100.0
50
100.0
100.0
Strongly disagree
Total
INTERPRETATION:
From a sample of 100 customers, 24% disagree, 12% strongly disagree with that fact. And
12% agree,6% strongly agree, and remaining 46% neither agree nor disagree with that
statement.
73
(xxi)
Percent
12.0
12.0
12.0
Agree
22
44.0
44.0
56.0
Neutral
15
30.0
30.0
86.0
Disagree
14.0
14.0
100.0
50
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, 44% agree, 12% strongly agree with that fact. And 14%
disagree, and remaining 30% neither agree nor disagree with that statement.
74
Percent
8.0
8.0
8.0
8.0
Agree
32.0
32.0
32.0
40.0
Neutral
48.0
48.0
48.0
88.0
Disagree
8.0
8.0
8.0
96.0
Strongly disagree
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
From a sample of 100 customers, 8% strongly agree,32% agree with that fact. And 8%
strongly disagree,4% disagree, and remaining 24% neither agree nor disagree with that
statement.
75
Percent
46.0
46.0
46.0
46.0
Agree
30.0
30.0
30.0
76.0
Neutral
12.0
12.0
12.0
88.0
Disagree
8.0
8.0
8.0
96.0
Strongly disagree
4.0
4.0
4.0
100.0
100.0
100.0
100.0
Total
INTERPRETATION:
46% of the customers express their satisfaction level with Bajaj Allianz service. They
Strongly agree with the statement, 30% customers also agree with it. And 12% have neutral
situation. And remaining 12% not satisfied with Bajaj Allianz.
76
HYPOTHESIS-1
H0: There is no relationship between investment of ULIP and Insurance coverage.
H1: There is relationship between investment of ULIP and insurance coverage.
CORRELATIONS
Correlations
Reason for
choosing
ULIPs
I would like to
because of
invest money
insurance
in ULIP.
coverage.
Pearson Correlation
.729**
money in ULIP.
Sig. (2-tailed)
.000
N
Reason for choosing
Pearson Correlation
100
100
.729**
ULIPs because of
insurance coverage.
Sig. (2-tailed)
.000
100
100
INTERPRETATION:
The above table shows that the reason for choosing ULIPs because of insurance coverage is
0.000 which shows that there is a relationship between investment of ULIP and insurance
coverage. We can choose alternate hypothesis because the significant value is less than
0.005.Hence it is very clear that most of the customers choosing ULIP product because which
provide insurance coverage over their investment. So we can conclude that most of the
customers prefer ULIP products than Mutual funds because of insurance coverage.
77
HYPOTHESIS-2
H0: There is no relationship between the investment pattern and annual income of the
customers.
H1: There is a relationship between the investment pattern and annual income of the
customers.
T-Test
Group Statistics
Annual
income
I would like to invest
Below 2 lakhs
Mean
Std.
Std. Error
Deviation
Mean
38
2.26
.806
.185
2.00
.000
.000
38
3.37
.955
.219
4.00
.000
.000
money in ULIP.
6-8 lakhs
I would like to invest
Below 2 lakhs
Equality of
Variances
Means
F
I would like to invest
Equal variances
money in ULIP.
assumed
Sig.
1.428
78
t
.247
.451
1.424
assumed
I would like to invest
Equal variances
3.956
.061
-.914
-2.882
assumed
Mean
df
I would like to invest
Equal variances
money in ULIP.
assumed
Equal variances not
Sig. (2-tailed)
Difference
19
.657
.263
18.000
.172
.263
19
.372
-.632
18.000
.010
-.632
assumed
I would like to invest
Equal variances
79
INTERPRETATION:
The above table shows the significance value of the relationship between investment pattern
and annual income is 0.247 for ULIP and 0.061 for Mutual Funds. It shows that there is no
relationship between the investment pattern and annual income level of the customers. We
can choose Null hypothesis because the significant value is greater than 0.005.Hence it is
very clear that the income level does not take part in the investment decision. It may be
change the premium of the policy, but not the decision.
80
CHAPTER IV
SUMMARY AND CONCLUSION
4.1 FINDINGS:
As insurance sector is growing rapidly so most of the life insurance players are selling
ULIP plans. And the awareness about ULIP is growing most of the people knows the
ULIP of life insurance. Since last 4-5 years the returns provided by ULIP were very
good so people tend more towards ULIP
Middle class people who are interested in investment but they are not aware of such
options so more awareness should be there, as main target customer are the middle
class peoples.
While investing any insurance company customer prefers for good branded company
Bajaj is Indias one of the most famous and richest family. And second preference is
given to SBI life as many people perceive that SBI Life is a govt. owned company so
people want security for their investment.
As now till date people in India dont wanted to invest in share market because then
were thinking that it is a bad thing but as the awareness about Mutual fund is
increasing as more and more private players are entering in the market. So awareness
about MF is not very good and it can be improved.
While survey I found that many all customers had already invested in ULIP and
Mutual Fund some people had invested in both options. 12% of people had invested
in Mutual Fund and 26% people had invested in ULIP and 4% people had invested in
both the options.
81
4.2 SUGGESTIONS:
While investing in mutual fund 44% of the customers looks their return,42%
customers observe the schemes performance in past years.
In future people will be more preferring to the security of their money means they
want a secured option which should provide good returns. As ULIP are the option in
which you can have the security also and good returns. The second choice of the
investors is return of their money.
54% of people given Best rating to the Bajaj Allianz Life Insurance ULIP, so from
this we can analyze that Bajaj Allianz Life Insurance is doing good but it is having
good potential in Market. To improve its market share they should improve the
awareness level of the common people.
Innovative Products and good brand name are the main success factor for Bajaj Allianz Life
Insurance. 6% customers are attracted due to the high reputation of the company. So if
BALIC wants to penetrate its market share they should improve the marketing strategy,
improving the distribution channel etc.
82
Mutual Fund is also getting more and more famous in Indian market as many private
companies innovating new funds as the investors demand.
Investors in Bajaj Allianz Life ULIP will be getting the advantage of life insurance
cover.
People are turning towards the ULIP as a good investment option but as ULIP is in its
starting phase so customers prefer only big brands.
Mutual fund is having good growth but many customers from rural areas dont have
any knowledge about Mutual fund. They think it is very risky.
Even investors from towns like Kottayam, Alleppey dont have that much of
Knowledge about fund selection they all are depend on Brokers.
People in such small towns are investing in only good branded companies as they
dont believe on other financial companies for taking ULIP.
There is a need for insurers to undertake a demand audit in order to understand what
the Policyholder wants and needs.
Deriving the right feedback from customers and bringing out innovative products
which cater to customer demands will go a long way in tapping the market potential
of the insurance and Mutual fund sector.
For Bajaj Allianz Life Insurance They should go for creating more awareness about
its ULIP as now also people are just investing because Bajaj is Indias most Known
and Favorite brand in past.
83
BIBLIOGRAPHY
REFERENCE:
1) Research Methodology, C.R Kothari, 2nd edition
2) Outlook Money, 15 May 2005, ULIP Mania.
3) The Business Line, 10 June 2007, Know all About ULIPS.
WEBSITE
www.irdaindia.gov
www.bajajallianzlife.co.in
www.quickmba.com
www.amfindia.com
www.mba.com
www.articlebase.com
84
QUESTIONNAIRE
PERSONEL INFORMATION
1. Name:
2. Gender:
(a) Male
(a) Female
3. Marital status:
(a) Married
(b) Unmarried
(a) 20-30
(b) 30-40
(c) 40-50
(d) 50-60
4. Age:
(e) 60-70
5. Occupation:
(a) Government
(c) Business
(d) NRIs
(e) Others
6. Annual Income:
(a) Below 2 lakhs
(c) 4- 6 lakhs
(b) Television
(d) Friends
(e) Consultants
85
(b) Good
(c) Fair
(d) Poor
(b) Agree
(c) Neutral
(d) Disagree
86
companies
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
(b) Agree
(c) Neutral
(d) Disagree
87
Agree
agree
Neutral
Disagree
Strongly
disagree
(11) Safety
(12) Liquidity
(13) Rate of Return
(14) Tax savings
(15) past schemes
Performance
(16) Rating of ULIP
by Agencies
(17)Advertisements
88
Agree
Neutral
agree
Disagree
Strongly
disagree
(11) Safety
(12) Liquidity
(13) Rate of Return
(14) Tax savings
(15) past schemes
Performance
(16) Rating of ULIP
by Agencies
(17)Advertisements
(b) Agree
(c) Neutral
(d) Disagree
89