TABLE OF CONTENTS
Executive Summary
Bibliography
Questionnaire Format
EXECUTIVE SUMMARY
Someone has greatly said that practical knowledge is far better than classroom
teaching. During this project I fully realized this and come to know about the present
real world of Insurance sector . It includes all the activities involved in providing
insurance products to the final customers. I am pleased to know about the consumers’
wants and competitors activities in the real world of Insurance. The subject of my study
is to analyse the present insurance sector and products offered by LIC by applying
various tools like cold calling and through direct interaction with customer’s. I have also
done research on the growth of private life insurance companies.
The report contains first of all brief introduction about the company. Then it contains
the current status of private insurance companies and foreign insurance companies
in India.
I also put forward recommendations of the consumers and conclusions that will
help LIC to provide consumer satisfactory services in the insurance sector
CHAPTER 1
INTRODUCTION TO INSURANCE
Insurance may be described as a social device to reduce or eliminate risk of life and
property. Under the plan of insurance, a large number of people associate themselves by
sharing risk, attached to individual. The risk, which can be insured against include fire,
the peril of sea, death, incident, & burglary. Any risk contingent upon these may be
insured against at a premium commensurate with the risk involved.
The insurance industry in India has come a long way since the time when businesses
were tightly regulated and concentrated in the hands of a few public sector insurers.
Following the passage of the Insurance Regulatory and Development Authority Act in
1999, India abandoned public sector exclusivity in the insurance industry in favor of
market-driven competition. This shift has brought about major changes to the
industry. The inauguration of a new era of insurance development has seen the entry
of international insurers, the proliferation of innovative products and distribution
channels, and the raising of supervisory standards.
By mid-2004, the number of insurers in India had been augmented by the entry of new
private sector players to a total of 28, up from five before liberalization. A range of new
products had been launched to cater to different segments of the market, while
traditional agents were supplemented by other channels including the Internet and
bank branches. These developments were instrumental in propelling business growth,
in real terms, of 19% in life premiums and 11.1% in non-life premiums between 1999
and 2003.
There are good reasons to expect that the growth momentum can be sustained. In
particular, there is huge untapped potential in various segments of the market. While
the nation is heavily exposed to natural catastrophes, insurance to mitigate the negative
financial consequences of these adverse events is underdeveloped. The same is true for
both pension and health insurance, where insurers can play a critical role in bridging
demand and supply gaps. Major changes in both national economic policies and
insurance regulations will highlight the prospects of these segments going forward.
Insurance or assurance, device for indemnifying or guaranteeing an individual against
loss. Reimbursement is made from a fund to which many individuals exposed to the
same risk have contributed certain specified amounts, called premiums. Payment for an
individual loss, divided among many, does not fall heavily upon the actual loser. The
essence of the contract of insurance, called a policy, is mutuality. The major operations
of an insurance company are underwriting, the determination of which risks the
insurer can take on; and rate making, the decisions regarding necessary prices for such
risks. The underwriter is responsible for guarding against adverse selection, wherein
there is excessive coverage of high risk candidates in proportion to the coverage of low
risk candidates.
In preventing adverse selection, the underwriter must consider physical, psychological,
and moral hazards in relation to applicants. Physical hazards include those dangers
which surround the individual or property, jeopardizing the well-being of the insured.
The amount of the premium is determined by the operation of the law of averages as
calculated by actuaries. By investing premium payments in a wide range of revenue-
producing projects, insurance companies have become major suppliers of capital, and
they rank among the nation's largest institutional investors.
General definition:
Fundamental definition:
Contractual definition:
General Definition:
The general definitions are given by the social scientists & they consider insurance
as a device to protection against risks, or a provision against inevitable contingencies
or a co-operative device of spreading risks. Some of such definitions are given below:
An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector
and Life Insurance Corporation came into existence in the same year. The LIC absorbed
154 Indian, 16 non-Indian insurers as also 75 provident societies—245 Indian and
foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance
sector was reopened to the private sector.
Sharing of Risks
Insurance is a co-operative device to share the burden of risk, which may fall
on happening of some unforeseen events, such as the death of head of the family, or on
happening of marine perils or loss of by fire.
Co-operative Device
Insurance is a co-operative form of distributing a certain risk over a group of
persons who are exposed to it (Ghosh & Agarwal). A large number of persons share
the losses arising from a particular risk.
Evaluation of Risk
For the purpose of ascertaining the insurance premium, the volume of risk
is evaluated, which forms the basis of insurance contract.
Amount of payment
The amount of payment in indemnity insurance depends on the nature of
losses occurred, subject to a maximum of the sum insured. In life insurance, however,
a fixed amount is paid on the happening of some uncertain event or on the maturity of
the policy.
Spreading of risk
Insurance is a plan, which spread the risks & losses of few people among a
large number of people. John Magee writes, ―Insurance is a plan by which large number
of people associates themselves & transfer to the shoulders of all, risks attached to
individuals.
Transfer of risk
Insurance is a plan in which the insured transfers his risk on the insurer. This
may be the reason that Mayerson observes, that insurance is a device to transfer some
economic losses to the insurer, and otherwise such losses would have been borne by the
insured themselves.
Ascertaining of losses
By taking a life insurance policy, one can ascertain his future losses in terms
of money. This is done by the insurer to determining the rate of premium, which is
calculated on the basis of maximum risks.
A contract
Insurance is a legal contract between the insurer & insured under which the
insurer promises to compensate the insured financially within the scope of insurance
policy, & the insured promises to pay a fixed rate of premium to the insurer.
To conclude, insurance is a device for the transfer of risks from the insured to the
insurers, who agree to it for a consideration (known as premium), & promises that
the specified extent of loss suffered by the insured shall be compensated. It is a legal
contract of a technical nature.
PRIMARY FUNCTIONS –
i) Provide Protection
The primary function of insurance is to provide protection against future risk,
accidents and uncertainty. Insurance cannot check the happening of the risk, but
can certainly provide for the losses of risk. Professor Hopkins observes "Insurance
is a protection against economic loss, by sharing the risk with others.”
SECONDARY FUNCTIONS
i) Prevention of losses
OTHER FUNCTIONS
CHAPTER 2
PROTECTIVE ROLE
vii) Protection to the business institution due to sudden death of the me key man
The successful operation and development of a business largely depends on its
directors, managers and administrative personnel. Sudden and untimely death of
such person may badly affect the functioning of the business and many problems
may also arise in day-to-day functioning of business. Insurance plays important
role by insuring the life of key man in the business so that the future can be
protected safely from uncertainties.
Insurance companies extends its support for the development and expansion
industrial and commercial activities by investing in shares and debentures issued by
the industrial units.
The various policies issued by marine insurance companies help for the
development of international trade by protecting the exporters/ importers from
marine losses and risks. This role of insurance companies has been helpful in earning
more foreign exchange by increased participation by traders in international trader
Insurance acts as a source among the small and medium scale industrial units
to compete with larger industrial units. Large-scale industries can bear the expenses
for protection against risks and uncertainties by getting insurance against such losses.
CHAPTER 3
CORPORATION OF INDIA
Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company stated by Europeans in Calcutta was the first life
insurance company on Indian Soil. All the insurance companies established during that
period were brought up with the purpose of looking after the needs of European
community and Indian natives were not being insured by these companies. However,
later with the efforts of eminent people like Babu Muttylal Seal, the foreign life
insurance companies started insuring Indian lives. But Indian lives were being treated
as sub-standard lives and heavy extra premiums were being changed on them. Bombay
Mutual Life Assurance Society heralded the birth of first Indian life insurance company
in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise
with highly patriotic motives, insurance companies came Tito existence to carry the
message of insurance and social security through insurance to various sectors of society.
Bharat Insurance Company (1896) was also one of such companies inspired by
nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance
companies. The United India in Madras, National Indian and National Insurance in
Calcutta and the Hindustan Co-operative Insurance Company took its birth in one of the
rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The
Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some
of the companies established during the same period. Prior to 1912. India had no
legislation to regulate insurance business. In the year 1912, the Life Insurance
Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies
Act, 1912 made it necessary that the premium rate tables and periodical valuations of
companies should be certified by an actuary. But the act discriminated between foreign
and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in force as Rs. 22.44 crore, it rose to
176 companies with total business-in-force as Rs. 298 crore in 1938. During the
mushrooming of insurance companies many financially unsound concerns were also
floated which failed miserably. The Insurance Act 1938 was the first legislation
governing not only life insurance but also non-life insurance to provide strict state
control over insurance business. The demand for nationalization of life insurance
industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly.
However, it was much later on the 19th of January, 1956, that life insurance in India was
nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75
provident were operating in India at the time of nationalization, nationalization was
accomplished in two stages; initially the management of the companies was taken over
by means of an Ordinance, and later, the ownership too by means of a comprehensive
bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st September,
1956, with the objective of spreading life insurance much more widely and in particular
to the rural areas with a view to reach all insurable persons in the country, providing
them adequate financial cover at a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from
its corporate office in the year 1956. Since life insurance contracts are long term
contracts and during the currency of the policy it requires a variety of services need was
felt in the later years to expand the operations and place a branch office at each district
headquarter, re-organization of LIC took place and large numbers of new branch offices
were opened. As a result of re-organization servicing functions were transferred to the
branches, and branches were made accounting units. It worked wonders with the
performance of the corporation. It may be seen that from about 200.00 crores of New
Business in 1957 the corporation crossed 1000.00 crores only in the year 1969-70, and
it took another 10 years for LIC to cross 2000.00 crore mark of new business. But with
re-organization happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 100 divisional
offices, 7 zonal offices and the corporate office. LIC’s Wide Area Network covers 100
divisional offices and connects all the branches through a Metro Area Network. LIC has
tied up with some Banks and Service providers to offer on-lint premium collection
facility in selected cities. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centres have been
commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New
Delhi, Pune and many other cities. With a vision of providing easy access to its
policyholders, LIC has launched its SATELLITE SAMPARK offices. The satellite offices
are smaller, leaner and closer to the customer. The digitalized records of the satellite
offices will facilitate anywhere servicing and many other conveniences in the future.
LIC continues to be the dominant life insurer even in the liberalized scenario of
Indian insurance and is moving fast on a new growth trajectory surpassing its own past
records. LIC has issued over one crore policies during the current year. It has crossed
the milestone of issuing 1,01,32,955 new policies by 15th Oct, 2005, posting a healthy
growth rate of 16.67% over the corresponding period of the previous year.
From then to now, LIC has crossed many milestones and has set unprecedented
performance records in various aspects of life insurance business. The same motives
which inspired our forefathers to bring insurance into existence in this country
inspire us at LIC to take this message of protection to light the lamps of security in as
many homes as possible and to help the people in providing security to their families.
3.2 MILESTONES
Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company on Indian soil
started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company
started its business.
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 to by the Insurance Act with the
objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the
central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act,
1956, with a capital contribution of Rs. 5 crore from the Government of India.
The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company established in
the year 1850 in Calcutta by the British.
There are various types of policies and schemes prepared to suit the need of different
individual. You can avail the one that satisfy your budget and need. Life insurance can
be broadly divided into 3 types:
In this type of life insurance, financial coverage is provided for a certain period of time
according to the terms of the policy. When the term period gets over, the policy holder
can either end the policy or continue it by paying annual premiums.
Term life insurance does not provide permanent coverage but is good for those who
want temporary protection on a limited budget. If you are thinking of availing a short
term life insurance policy to pay off loans, term life insurance policy is the right option
for you. It can be renewed according to the policy holders wish and need.
In this type of life insurance, the insured is provided with permanent financial
protection. It is a long term insurance plan where the policy holder needs to pay
premiums annually. There are various types of whole life insurance that individuals can
avail in accordance to their needs such as Non-participating, Participating,
Indeterminate premium, Economic, Limited Pay, Single Premium and Interest sensitive.
But all life insurance companies may not offer all the types of whole insurance policies
stated above.
This is a permanent life insurance plan which has flexible terms. It allows some of the
benefits such as death benefits, saving benefits to be reviewed and changed according to
the policy holder�s need. In this policy, the insured enjoys not only benefits of term
life insurance but also cash value (premiums that are above the cost insurance are
credited as cash value). You can choose from the 3 types of universal life insurances, i.e.
Single premium, fixed premium and flexible premium, in accordance to your
requirement.
Single premium universal life insurance: In single premium universal life insurance,
the policy holder pays a big premium amount at the beginning of the policy. The policy
remains active as long as the cost of insurance (COI) is covered by the initially paid
amount.
Fixed premium universal life insurance: In fixed premium universal life insurance,
the policy holder makes monthly or yearly payments of fixed amount for a certain
period of time.
Flexible premium universal life insurance: In this option of universal life insurance,
the policy holder can pay monthly premiums of his choice as long as the minimum
payment amount is covered.
Life insurance is therefore an essential step towards safeguarding the future of your
family. People should understand how these life insurance policies work and avail the
one that seems suitable to their needs. Take the help of a good insurance agent who will
help you with details of the policies available.
Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all insurable
persons in the country and providing them adequate financial cover against
death at a reasonable cost.
Maximize mobilization of people’ savings by making insurance-linked savings
adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its
policyholders, whose money it holds in trust, without losing sight of the interest
of the community as a whole; the funds to be deployed to the best advantage of
the investors as well as the community as a whole, keeping in view national
priorities and obligations of attractive return.
Conduct business with utmost economy and with the full realization that moneys
belong to the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the
changing social and economic environment.
Involve all people working in the Corporation to the best of their capability in
furthering the interests of the insured public by providing efficient service with
courtesy.
Promote amongst all agent and employees of the corporation a sense of
participation, pride and job towards achievement of corporate objective.
CHAPTER 4
ROLE OF LIC
The share of LIC for this period has further come down to 75%, while the
private players have grabbed over 24% share. “With the huge potential the market has,
the Government should, more seriously look into increasing the FDI cap in the sector"
said Mahendra K. Sanghi, ASSOCHAM President. During April-June 2005, the largest
private company ICICI Prudential has increased its share from 6.25% in 2004-05 to
7.68% in current fiscal. The opening up of the sector has given some of the most
innovative products like the customized insurance policies and now the unit linked
policies that have gained much of customer attention. The sector has huge potential
and certain other new and innovative areas can also be looked into for enhancing
market share and premium income, said Sanghi.
HDFC is next in the row with 2.91% market share which has increased from
1.92%last fiscal followed by TATA AIG which now shares 2% of the market from
1.18%last fiscal. Birla Sun life's share has dropped from 2.45% during FY'05 to 1.76% in
first two months of FY'06. SBI life comes next with 1. 72% share and has in fact dropped a
few percent points from last year. Max New York life and Aviva Life Insurance have
captured more than 1% share each from less than 1% share during FY'05.
Others like ING, AMP Sanmar, Met Life and Sahara India have less than 1 %
share. The detail of the market share of life insurance companies is attached. The
market share of the private players has doubled every year from 5.6% in 2002-03 to,
12% in2003-04 and close to 22% in 2004-05.The state run insurance company has
the biggest advantage of its huge network which the company can use to penetrate
into rural market that is still lying untapped. Another option with the life insurance
companies to capture more and more market share could be product innovation and
constantly developing an insurance product in order to meet the ever-changing
requirements of the customer. Quality customer service and education can be another
area where a company can differentiate itself 48 from other companies.
Life insurance is possibly the most- retail of all financial services, and is required
by people of all segments and in all locations. At a broad level, ICICI Prudential aims to
secure the families of the middle and upper class working people in urban India. To this
end, they have pursued a pan-India distribution strategy and backed it up with arrange
of products that meets the needs of a wide range of people, be they from rural or urban
areas. Today, they have branches in 74 locations and rural presence in more than 15
states. Certainly, the majority of the business still comes from urban areas such as
metros and mini-metros. However, they have seen rural business grow significantly
and expect it to continue making greater contribution in the years to come.
The Corporation, which started its business with around 300 offices, 5.6 million policies
and a corpus of INR 459 million, has grown to 2,048 offices servicing around 180
million policies and a corpus of over INR 3.4 trillion.
The organization now comprises 2048 branches, 100 divisional offices and 8
zonal offices, and employs over 1 million agents. It also operates in 12 other
countries, primarily to cater to the needs of Non Resident Indians.
With the change in the India's economic philosophy from the early 1990s, and the
subsequent relaxation of state control over several sectors of the economy, the
monopolistic position of the Life Insurance Corporation of India was diluted, and it
has had to compete with a number of other corporate entities, Indian as well as
transnational Life Insurance brands.
In the financial year 2006-07 Life Insurance Corporation of India's number of policy
holders are said to have crossed a whopping 200 million (fourth in terms of
population of the countries of the world)
Launching LIC's e-portal here, he said the Corporation "supported us (government) when
we opened up insurance because it was confident of doing better in a competitive
environment. LIC continues to be the market leader with 88 per cent market share of new
policies and 78 per cent of premium. It is clearly recognised as the market leader."
The e-portal (licindia.com) will provide information on policy status, bonus, premium
payment, loans and change of address. It will facilitate online payment of premium
and has details of the doctors and agents. It also has a branch locator and `maturity
alert' facility. The objective is to provide world-class service.
Mr. Chidambaram said the e-portal was another example of LIC's constant
innovation using information technology. Some of the multi-interfaces it offered to
customers included call centres, IVRS, SMS and satellite branches.
1) As a Govt of India owned Company, LIC is 51 + years old in the field of life
insurance and money management. LIC's Life Fund size as on day is more
than Rs 5 Lakh Thousand Crores.
2) Any LIC policyholder or the nominee will vouch for the best claims settlement
from LIC. Perhaps, this is the only institution where you as a policyholder are
virtually chased till such time your claim cheques is handed over to you!
3) LIC has won `NDTV Profit Leadership Award 2007 under Life Insurance
Category', `Outlook Money Award 2007 as the best Life Insurer', `CNBC Awaaz
Consumer Award 2007 as the best Life Insurance Company', `Golden Peacock
Award for excellence in Corporate Governance 2007', `Web 18 Genius of the Web
Award 2007 and many more'.
4) LIC adjudged No.1 Trusted Service Brand for the 4th successive year by ET
Brand Equity Survey.
5) LIC has been adjudged Superbrand India for 2004-06 and Reader's Digest
`Trusted Brand' Asia 2007.
6) This is the only corporation that is catering to more than 190 million
satisfied policyholders in India and abroad.
7) This is one of the very few institutions that pays ex-gratia interest on pending
maturity claims!
8) More than 2050 LIC branches all over India are connected together to serve
you. You can pay your premium anywhere in the country.
9) During its long existence, LIC has kept on updating its portfolio by bringing in
new plans depending on public requirement. More than 50 of them are most
popular and can be customized to meet any of your requirements. LIC ULIPs
have become extremely popular due to the returns they offer. Money Plus- latest
LIC Unit Linked Plan is a case in point.
10) All LIC Plans come with Sovereign Guarantee i.e., Govt of India Guarantee
regarding repayment. Infact, as of now, only LIC plans enjoy this Govt Guarantee.
Beneficiary for this Sovereign Guarantee is you and you alone as the
policyholder/ would-be policyholder.
11) All LIC plans are characterized by low premium, high life insurance
coverage and a vast package of benefits offered by them. Add to this package,
section 80C benefit and section 10(10D) benefit on the maturity proceeds,
you will find investment on LIC plans one of the most coveted investment
options available to you.
12) Premium paid under Key-Man Insurance plan is a recognized
business expense under section 37(I) of the Income-Tax Act. For companies
making profits, this is a very good incentive indeed.
13) Through Employer-Employee Insurance scheme, you can recognize the
worth of your most valuable employees whose absence you can ill afford to lose.
14) Entire contribution to LIC Group Gratuity Scheme is a recognized business
expense in the hands of the employer. In addition, through this scheme, the
employer can transfer his gratuity liability to the corporation and fund the same
under cash accumulation scheme. The most popular among all the companies.
15) LIC is declaring quite an impressive bonus (profits) on all its with-profits
policies every year. Extra attraction under LIC Bonus is (a) it is calculated every
year on the insured amount and not on the premium paid and (b) entire bonus
received along with insured amount either by you on maturity of your policy(ies)
or by your nominee in your absence during the currency of your policy(ies) is
free from income-tax under section 10(10D) of the Income-tax Act.
16) On most of the LIC plans, you can borrow to take care of your immediate
monetary requirements. None of the policy benefits get affected as a result of
borrowal. Infact, policy loans offer one of the most attractive investment
opportunities.
17) You can pay your premium 3 years in advance at 5% discount. Chief
attractions of this advance payment of premium are (a) there is no possibility of
your overlooking your premium payment and getting your policy(ies) lapsed
wherever you are in the world and (b) you will be earning 5% tax-free interest
on the unutilized portion of the amount left with LIC after apportioning the
regular instalment.
18) Most of the LIC plans come with Riders to take care of Total and
Permanent Disablement due to Accident and some of the most dread
diseases that may result in loss of income.
19) LIC pension plans that guarantee your life pension are extremely
popular. You can park your hard earned money safely with the corporation and
enjoy pension as long as you are alive.
Due to these reasons and lot more, LIC should be your obvious choice for all
your life insurance requirements.
CHAPTER 5
This cap, however, will have a great impact on the Indian counterpart to raise
74% of the funds in their joint venture. To add to this if Indian partners like State bank
of India, with over 9000 branches nationwide, will demand premium for their existing
distribution network, we will see the foreign insurance companies demand
hefty premiums for bringing in their global expertise and brand. Mr. Vaidya, Chairman
of SBI, has recently stated that all it is looking for is a good and reliable partner and
thequestion of a hefty premium to be charged to its foreign partner is not significant.
The monolith has finally come to business senses foreign companies are unhappy even
about laws pertaining to repatriation of funds. The Stipulated investment criteria is also
something that all players in the sector, be it Indian or foreign, are closing watching.
The foreign players are essentially looking to tap their" global expertise in the variety
markets and use that know-how to work in the Indian scenario. Designing of products,
information systems, technical expertise, manpower planning etc. is what one expects
the foreign players to have a say in
Any venture of the joint kinds needs to be between equals. If this is not there then there
is every chance that a partner in the venture will feel increasingly uncomfortable and
would be looking to call the joint venture off.
LIC has always acknowledged the need to expand. Our expanding efforts have
been consistent and are evident though our associations given below for your
reference.
INTERNATIONAL OPERATIONS
LIC Fiji
LIC Mauritius
LIC United Kingdom
LIC (International) B.S.C (C), Bahrain
LIC (Nepal) Ltd
LIC (Lanka) Ltd
Saudi Indian Company for Co-op. Insurance, KSA.
LIC Mauritius Offshore Ltd.
LIC Co-ordinating Office in India
ASSOCIATES
LIC Housing Finance Ltd.
SUBSIDIARIES
LIC Nepal: A joint venture company formed in 2001 with the Vishal Group
of Industries, Nepal.
LIC Lanka: A joint venture company formed in 2003 with the Bartleet Group
of Companies, Sri Lanka
CHAPTER 6
RESEARCH ANALYSIS
RESEARCH PROBLEMS
After doing the literature review and understanding the motives of the
INSURANCE in India and benefits achieved there by, question arises whether LIC is
beneficial for Insurance sector.
RESEARCH OBJECTIVE:
Objective of a research work defines the driving force for a research action. It
is the focal point around which the whole action revolves. This dissertation was
undertaken to fulfil the following objectives:
Sample Design:
RESEARCH PLAN:
Secondary research was conducted with regard to the short term &
long term impact study.
25
20
15
YES
NO
10
0
YES NO
CONCLUSION
6
OTHERS
5
ICICI
4 HDFC
3 LIC
0
LIC HDFC ICICI OTHERS
CONCLUSION
Out of all the companies majority of the people prefer LIC of India.
YES
NO
CONCLUSION
12
10
8
LIC
HDFC
6
ICICI
OTHERS
4
0
LIC HDFC ICICI OTHERS
CONCLUSION
55% Of The People Agree That LIC Of India Had Plays Major Role In Life
Insurance Policies
12
10
8
LIC
HDFC
6
ICICI
OTHERS
4
0
LIC HDFC ICICI OTHERS
CONCLUSION
14
12
LIC
10 HDFC
8 ICICI
OTHERS
6
4 OTHERS
ICICI
2 HDFC
0 LIC
LIC HDFC ICICI OTHERS
CONCLUSION
LIC of India has massive public support in the current fiscal year which is 70%
20
18
16
14
12
YES
10
8 NO
6
4 NO
2
0
YES
YES
NO
CONCLUSION
95% of people think that Insurance Policy is in the direction of public welfare.
YES
NO
CONCLUSION
YES
NO
CONCLUSION
80% of people think that risk coverage factor included in Insurance policy
attracts general public towards the policy.
YES
NO
NO
YES
0 2 4 6 8 10 12 14
CONCLUSION
According to survey 60% people think that the arrival of so many private
companies in this insurance sector envisage a lot of choice to policy holder.
18
16
14
12
NO
10
YES
8
6
4
2
0
YES NO
CONCLUSION
16
14
12
10 NO
YES
8
0
YES NO
CONCLUSION
CHAPTER 7
7.1FINDINGS
1) Now days also insurance is most popular as more plain protection against death
and people are unaware about the other aspects of insurance.
2) According to current scenario life and mater insurance are the most popular ones
followed by fire insurance.
3) Majority of people consider the insurance premium paid by them as reasonable.
4) Only few counted people are unaware about the entry of private players into. The
insurance industry and a very high majority of people support their entry.
5) By the entry of private players. Consumers are expecting the premium to down
which would be the biggest blessing.
After finding’s we can see about LIC OF INDIA features and his the tendency to
take the expedient approach and focus on the far right of the LIC OF INDIA spectrum,
peacetime contingency operations and conduct training as usual, while briefing that
the LIC OF INDIA block has been checked, will lead us to a possibly fatal false sense of
security. The probability of becoming involved in a LIC OF INDIA operation is high. The
potential to attract international attention, even with limited forces, is also great. Units
have demonstrated that with a balanced training focus and proper preparation, many
pitfalls outlined above can be avoided
7.2 RECOMMENDATIONS
7.3 CONCLUSION
After overhauling the all situation that boosted a number of Pvt. Companies
associated with multinational in the Insurance Sector to give befitting competition to
the established behemoth LIC in public sector, we come at the conclusion that :
1) There is very tough competition among the private insurance companies on the level
of new trend of advertising to lull a major part of Customers.
2) LIC is not left behind in the present race of advertisement.
3) The entry of the Pvt. Players in the Insurance Sector has expanded the product
segment to meet the different level of the requirement of the customers. It has brought
about greater choice to the customers.
4) Private insurers have restricted reach to the customers
5) LIC has vast market and very firm grip on its traditional customers and monopoly
of life insurance products.
6) Bank assurance - that allows life insurers to leverage on the risk product through
bank network, was adopted by private players.
But LIC was also not left behind as picking up majority stake in the corporation
Bank and large equity stake in the Oriental Bank of Commerce. IRDA is also playing
very comprehensive role by regulating norms mandating to private players in this
sector, that increases the confidence level of the customers to the private players.
After Finding’s we can see about LIC features and his The tendency to take the
expedient approach and focus on the far right of the LIC spectrum, Peacetime
Contingency Operations and conduct training as usual, while briefing that the LIC block
has been checked, will lead us to a possibly fatal false sense of security. The probability
of becoming involved in a LIC operation is high. The potential to attract international
attention, even with limited forces, is also great. Units have demonstrated that with a
balanced training focus and proper preparation, many pitfalls outlined above can be
avoided.
BIBLIOGRAPHY
Magazine
Yogkshem – LIC OF INDIA Magazine
Outlook Express
Business today
Finance & Banking
Money Outlook
News Paper
Business standard
Times of India
Economic times
Hindustan times
WEBLIOGRAPHY
www.bloomberg.com
www.moneycontrol.com
www.allbankingsolution.com
www.scribd .com
www.rbi.org
K.E.S SHROFF COLLEGE OF ARTS & COMMERCE (TYBBI VITH SEMESTER)
Role of LIC In Insurance Industry | 66
QUESTIONNAIRE FORMAT
KES SHROFF COLLEGE OF ARTS AND COMMERCE
NAME OF CUSTOMER:
CONTACT NO.:
4) According to you, who have played a major role in the field of Life Insurance
Company?
LIC HDFC ICICI OTHERS
5) Which Insurance companies have been successful to make strong public base by
advertisement?
LIC HDFC ICICI OTHERS
6) Which Insurance Company has gained massive public support in the current fiscal
year?
LIC HDFC ICICI OTHERS
9) Do you think that risk coverage factor included in Insurance policy attracts
general public towards the policy?
Yes No
10) Do you think that the arrival of so many private companies in this insurance
sector envisage a lot of choice to policy holder?
Yes No
11) Do you agree that customer-centricity and transparency are the buzzwords
for success in this evolving industry?
Yes No