Performance Evaluation of BIRLA SUN LIFE INSURANCE

Hafijulla Ansari 1004-10-672-324

Project submitted in partial fulfillment for the award of the Degree of MASTER OF BUSINESS ADMINISTRATION By Osmania University, Hyderabad -500007

ANNEXURE I

DECLARATION

I hereby declare that this Project Report titled "Performance Evaluation of Birla Sun Life Insurance" submitted by me to the Department of Business Management, O.U., Hyderabad, is a bonafide work undertaken by me and it is not submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before.

HAFIJULLA ANSARI H. No: 12-5-104, Vijayapuri Colony, Tarnaka, Secunderabad 500017, Andhra Pradesh, India (Name and Address of the Student) Signature of the Student

ANNEXURE II

CERTIFICATION

This is to certify that the Project Report title "Performance Evaluation of Birla Sun Life Insurance submitted in partial fulfillment for the award of MBA Programme of Department of Business Management, O.U. Hyderabad, was carried out by Mr. Hafijulla Ansari under my guidance. This has not been submitted to any other University or Institution for the award of any degree/diploma/certificate.

Dr. Y. Jahangir, Assistant Professor, Osmania University, Hyderabad 500007 (Name and Address of the Guide) Signature of the Guide

PREFACE
To achieve partial and concrete results, it is necessary that theoretical knowledge must be supplemented with practical environment. Keeping this view in mind, I have completed my research work regarding Performance Evaluation of Birla Sun Life Insurance. By doing this research work I have learnt a lot of things which would be really helpful for me in future. This experience in decision making and practical application of knowledge has contributed greatly to my growth.

Hafijulla Ansari

Acknowledgement
I take this opportunity to express my acknowledgement and deep sense of gratitude for rendering valuable assistance and guidance to me by following personality for successful completion of my project. I am highly obliged to my project guide Dr. Y Jahangir for his personal encouragement, prompt assistance and help provided to me in completion of my project. He has helped me a lot by giving suggestions and guidance whenever needed. His contribution has been extremely useful and is greatly appreciated. I honor his knowledge and competence in the field of management.

Sincerely, Hafijulla Ansari Osmania University Hyderabad -500007

TABLE OF CONTENTS

Table of Contents CONTENTS List of Tables List of Figures 1. INTRODUCTION 2. LITERATURE REVIEW 3. INTRODUCTION TO COMPANY 4. DATA ANALYSIS & INTERPRETATION 5. FINDINGS OF THE STUDY 6. SUMMERY AND CONCLUSION BIBLIOGRAPHY ANNEXURE PAGE NUMBERS i ii 1 6 22 49 57 58 60 61

LIST OF TABLES AND FIGURES

LIST OF TABLES
TABLE 4. 1 4. 2 4. 3 4. 4 Market Share of Private Companies 4. 5 4. 6 4. 7 55 Types of Plan Satisfaction With The Plan Satisfaction With The Services of The Company People Want To More Investment In BSLI People Having Other Insurance Plan Apart From BSLI Share of Different Companies PAGE NUMBER 49 50 51 52 53 54

LIST OF FIGURES
FIGURE 4. 1 4. 2 4. 3 4. 4 Market Share of Private Companies 4. 5 4. 6 4. 7 55 Types of Plan Satisfaction With The Plan Satisfaction With The Services of The Company People Want To More Investment In BSLI People Having Other Insurance Plan Apart From BSLI Share of Different Companies PAGE NUMBER 49 50 51 52 53 54

CHAPTER-1

INTRODUCTION

1.1 INTRODUCTION
Insurance is nothing but a system of spreading the risk of one onto the shoulders of many. While it becomes somewhat impossible for a man to bear by himself 100% loss to his own property or interest arising out of an unforeseen contingency, insurance is a method or process which distributes the burden of the loss on a number of persons within the group formed for this particular purpose.Basic human trait is to be averse to the idea of risk taking. Insurance, whether life or non-life, provides people with a reasonable degree of security and assurance that they will be protected in the event of a calamity or failure of any sort.Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Under the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against include fire, the perils of sea, death and accidents and burglary. Any risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. INSURANCE INDEMNIFIES ASSETS & INCOME Every Asset has a value and generates Income to its Owner. There is a normally expected Life-time for the Asset during which time it is expected to perform. If the Asset gets lost earlier, being destroyed or made Non-functional through an Accident or other unfortunate event the Owner is Prejudiced. Insurance helps to reduce CONSEQUENCES of such Adverse Circumstances which are called Risks. INSURANCE IS THE SCIENCE OF SPREADING OF THE RISK It is the system of spreading the losses of an Individual over a group of Individuals INSURANCE IS A METHOD OF SHARING OF FINANCIAL LOSSES Of a few from a common fund formed out of Contribution of the many who are equally exposed to the same loss. What is uncertainty for an Individual becomes a certainty for a Group. This is the basis of all insurance operations. Thus insurance convert uncertainties to certainty.

1.2 OBJECTIVE, NEED & SCOPE OF THE STUDY 1.2.1 Objectives

To determine and analyze the Market Potential of the Birla Sun Life Insurance Company. To determine whether the customers are satisfied with the policies of the company. To know the the customer awareness regarding the Birla-sun life insurance and its products. To study and determine the competitor position in the market. To know the future plans of the people for buying the policies. Proper understanding and analysis of life insurance industry. Conduct market survey on a sample selected from the entire population and derived opinion on that research.

1.2.2 Need
Life insurance is chiefly a risk management tool, meant to offer financial protection to your dependents in the unfortunate event of your death. But in India, as the most other developing market, life insurance has come to present more than just risk cover. This particular study is conducted on the topic titled Performance Evaluation of Birla Sun Life Insurance Company. The aim of this research study is to know about life insurance. It is done to know the perception of people towards the insurance policy. Bancassurance has mostly been a phenomenal success and, although slow to gain pace, is now taking across Asia, especially now that banks are starting to become more diverse financial institutions, and the concept of universal banking is being accepted. In India, the signs of initial success are already there despite the fact that it is a completely new phenomenon.

1.2.3 Scope
The study is restricted to Navi-Mumbai region only. The study also analyses the preferences regarding different life insurance policies of Birla-sun life insurance. For this study 100 respondents of Navi-Mumbai are chosen. Now days there are lot of private companies in market so its important to know what motivates the customer to buy the policy. Birla sun life is the fastest growing private insurance company in India. It determines market share of the various private companies in India.

1.3 RESEARCH METHODOLOGY

Research means a search for knowledge or gain some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch of knowledge.

1.3.1 Research Design

A research design is the arrangement of conditions for the collections and analysis of data in a manner that aims to combine relevance to research purpose with economy in procedure.

1.3.2 Universe
The universe of the study is Navi-Mumbai.

1.3.3 Sample Unit

The sample unit pertaining to the study is 100 respondents of Navi-Mumbai region.

1.3.4 Sample Size

The sample size of 100 served the purpose of the study.

1.3.5 Sample Method

The sampling method used is non-probability convenience sampling.

1.3.6 Methods of data collection 1.3.6.1 Data collection

The word data means any raw information, which is either quantitative or qualitative in nature, which is of practical or theoretical use. The task of data collection begins after a research problem has been defined and research design chalked out. While deciding about the method of data collection, the researcher should keep in mind that there are two types of data primary and secondary.

Primary data
This is those, which are collected afresh and for the first time, and thus happen to be original in character. There are many ways of data collection of primary data like observation method, interview method, through schedules, pantry reports, distributors audit, consumer panel etc. The Team Managers and employees of both the Department were consulted to get information about procedure of both the online and off line share trading. But the method used by us for the primary data collection was through questionnaires. Questionnaire Method For the collection of primary data I used questionnaire method. A formal list of questions, which are to be asked, is prepared in a questionnaire and questions are asked on those bases. There are some merits and demerits of this method. These as under: Merits: 1. Low cost even when universe is large. 2. It is free from bias of interviewer. 3. Respondents have proper time to answer. 4. Respondents who are not easily approachable can also be reachable. 5. Large samples can be made.

 Secondary data
These are those data, which are not collected afresh and are used earlier also and thus they cannot be considered as original in character. There are many ways of data collection of secondary data like publications of the state and central government, reports prepared by researchers, reports of various associations connected with business, Industries, banks etc. And the method, which was used by us, was with the help of reports of the company.

1.3.7 Sample Size

I have met 250 people, to know about their perception regarding companies and there policies after that I have taken 25 People they have fill up the questionnaire and given response.

CHAPTER-2

LITERATURE REVIEW

2.1 LITERATURE REVIEW

Ramkumar D(2003) studied the role of relationship marketing in life insurance sector. In todays impersonal marketplace, customer satisfaction, retention and loyalty are rapidly become the thing of the past. Relationship marketing brings them back to the forefront, providing easy to apply solutions and strategies for establishing meaningful bonds with customers and turning them into reliable, life-long partners. Relationship marketing can be defined as the process to identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders at a profit so that the objective of all parties involved are met; and this is done by mutual exchange and fulfillment of promises. The important objectives of relationship marketing are to acquire new customers, maintain and enhance existing relationships with existing customers, reactivation of ex-customers, and handling of customer terminations. The key objective of relationship marketing is to establish a one to one relationship with all the customers. This may sound like a daydream few years ago; but thanks to the technology breakthrough and technological solutions providers it is very much of reality. Rajesham Ch(2004) revised that insurance sector has not only been playing a leading role within the financial system in India but also has significant socio-economical function, making inroads into the interiors of the economy and is being considered as one of the fast developing area in the Indian financial sector too. It has also been facilitating economic development with an objective to build an efficient, effective and a stable insurance business in India as well as a strong base to both the needs of the real economy and socio-economic objective of the country. It has been mobilizing long term saving through life- insurance to support economic growth and also facilitating economic development, insurance cover to a large segment of people, while the non-life insurance and reinsurance firms in India are main providers of risk financing for manmade disasters and natural catastrophes. Thus, both life insurance and non-life insurance are found playing a significant role in avoiding or facing the risk of life and business enterprises and also aiding to certain extents for their smooth sailing. Therefore, an attempt is made in this paper to highlight the developments of insurance sector in India in a phased manner and to examine the reasons for the entry of private and foreign insurance players

into Indian insurance market and to present the changing scenario of insurance business in India. It is also attempted to examine the growth of Indian insurance sector during the period of pre and post liberalization and finally to suggest the strategies and challenges need to be adopted by Indian insurance sector in the light of global scenario so as to enhance its market share. Mehra J(2005) studied that economic growth in the emerging markets has time and again outpaced the developed and industrialized countries. Alongside the rising importance of emerging economics, their life insurance sectors are also drawing more attention. Its been four years since the life insurance sector was opened up for private players in India. The reasons that prompted the government to bring in reform in this sector are well known. While the public sector life insurance companies made enormous contribution in the spread of awareness about insurance, and expanded the market, it was recognized that their reach was still limited, the range of product offered restricted to the services to the consumer inadequate. It was also felt that the rapid economic growth witnessed in the 90s couldnt be sustained without a thriving insurance sector. Today, the private accounts for nearly 20% of the market. The market share of the private players has to be seen in the context of this enlarged market. There has been a flurry of private players providing a wide range of innovation products, services and customized solutions. Emerging markets-such as China, India, Mexico, and Russia- are home to some 86% of the worlds population. Collectively, they account for 23% of world economic output. Yet, insurance business is underdeveloped in these markets. In fact, India as a country is under-insured. Only 35% of the 250 million insurable population is insured. Exploiting the growth potential of emerging insurance marketIndia and China are in the spotlight. Both the countries currently attract a lot of attention due to their size, strong growth performance and favorable regulatory changes. To begin with, India and China are the most populous countries and both have sustained impressive economic growth in the last decade. Between 1993 and 2003, annual real GDP growth averaged 8.9% in china and 5.9% in India. Interestingly, both markets have gone through a similar period of nationalization of their insurance business, although China revoked state monopoly earlier than India.

Calandro j, J flynn R (2005) studied that many insurance companies vigorously pursue top-line growth, even though it has the potential to develop unprofitably over time. The time lag(or tail) between when insurance is sold and when claims are paid generates risks unique to insurance companies. Furthermore, the insurance market is both mature and efficient (i.e. its level of completion is very high), which means that profitable opportunities are both rare and untenable unless protected by competitive advantage. There currently no practical measure available ( of which the authors are aware ) at the business unit level to evaluate insurance premium growth in the face of the industrys risk, impairing executives ability to assess segment opportunities (and hazards), thus hampering strategies decision making. The purpose of this paper is to introduce a practical measure developed by the authors called Underwriting Return (UWR) which aims at helping to alleviate this situation. The paper introduces UWR which was developed during the course and scope of the authors work in the insurance industry, and their research into applying value-based management to that industry. The paper finds that UWR is a practical measure that property and casualty executives can use at the business unit level to help quantify market segments to grow, hold, harvest and abandon. A variety of strategies analysis tools, such as the popular Boston Consulting Group matrix, are utilized today. In general, the application of such tools is hampered by an imprecision of measurement but each can add a level of insight to executive resource allocation options. UWR can further aid insurance executive in strategic analysis by helping to quantify in which segments to compete, and which ones to abandon. The paper demonstrates the utility of the measure in an example based on an actual analysis. Anon (2005) studied all the aspects of the Indian insurance industry along with an outlook for potential developments. The report examines the trends in industry, besides the competitive landscape offers a brief analysis on the main players in the industry. It contains an assessment based on PEST analysis, covering the relevant political, economic, social and technological factors that have implications for the development of the industry. The report also evaluates the industry within th Michael porter framework. It goes on to describe the competitive landscape and provides a comparative financial study of the major players in the industry. Insurance constitutes an important and increasing proportion of the gross financial savings of the household sector in india.

The private sector, in life as well as the non-life segments gained more prominent in the life insurance sector. The factors that have driven change include: Increasing Gross Financial Household Savings. Deregulation in the Indian Insurance Market. Increase in dependency ratio However, dearth of new products represents a major implication. Sethi N (2005) studied the concept of banc assurance in India. Banc assurance has mostly been a phenomenal success and , although slow to gain pace, is now taking off across Asia, especially now that banks are starting to become more diverse financial institutions, and the concept of universe banking is being accepted. In India, the signs of initial success are already there despite the fact that it is completely new phenomenon. The factor and principles of why it is a success elsewhere exists in India, and there is no doubt that banks are set to become a significant distributor of insurance related products and services in the years to come. Rao (2005) analyzed that the insurance industry has grown by 83 percent since the opening up the sector. Remarking on the performance of the insurance industry, C S Rao, Chairman, Insurance Regulatory & Development Authority (IRDA), said public sector players have not suffered with the opening up of the sector. Insurance premium income has risen to Rs 82,415 crore (Rs 824.15 billion) in 2003-2004, against Rs 45,000 crore (Rs 450 billion) in 2000-01. Rao expects premium income in the life insurance sector to rise further by 15-16 percent and non-life insurance premium by 14 percent in 2005-06. The growth comes on the back of healthy demand from the manufacturing sector. Kannan k.v (2006) reviewed in their study that the market potential for private insurance companies is found to be greater in the long run as most of the Indians are of the opinion that, private insurance companies would be able to perform well in the future. The private and foreign insurance companies have too immediate steps in appointing more number of

agents and/or advisors in addition to the employees as it has found that agents are the best channel to reach the general public regarding selling of insurance products. The private and foreign insurance companies have to concentrate on the factors like prevention of loss, assured returns and long term investment. They can also focus on an insurance amount of Rs. 1-2 lakhs with money back policies. Hence, the market has potential. The private and foreign insurance companies that are taking immediate steps can tap it. Sasidharan Sanjeev (2006) studied that the insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360degree turn witnessed over a period of almost two centuries. Athma Prashanta(2007) reviewed that in globalization policy, insurance company face a dynamic global business environment. The existing insurers are facing challenges from non-traditional competitors who are entering into the retail market with new approaches and through new channels. While quality of service is the main influencing factor in the finance market, in the insurance market, product attributes are the main factors that influence the success of insurance companies. Though, there has been growth in life insurance industry over the past few years, comparatively, insurance penetration in India has not increased in spite of the considerable growth potential of Indian life insurance market. With liberalization, many insurance players have entered this field from the year 2000, and the task before them now is to identify what factors influence in decisionmaking. In this context, this study assumes importance. The main objective of the paper is to identify the factor s which the consumers take into consideration before selecting life insurance products and determine the extent to what these factors are taken into consideration for choosing the life insurance products. This research is carried out by collecting primary data from 200 policyholders of Life Insurance Corporation on India through self-structured questionnaires. The sample consists of 100 policyholders from urban area and 100 policyholders from rural area. C2 test is employed to test if there is any association is used to find out which factor has more influence. Both, product and non-product attributes have been found to be important in selecting a policy but they have been rated differently. Rating is different in urban and rural areas.

Hsieh An (2008) investigated the relationship between customer perception of public relations (PR) and customer loyalty to test for the moderating role of brand image in that relationship. Data were collected in a survey of customers of the insurance industry in Taiwan, using a questionnaire designed on the basis of focus-group discussions with 30 consumers. Hierarchical regression analysis of data from 367 respondents was used to test two hypotheses. The results show that consumers perception of an organizations PR practice is an antecedent of loyalty. The impact of public relation perception (PRP) on customer loyalty is stronger and more significant when the brand image is favorable. The effect of PRP on customer loyalty is negligible. This study extends previous research by examining the moderate of brand image. Further research is indicated, to identify the key moderators of the driving force of PR in relation to customer relationship marketing. This paper proposes an original eight-item scale for the assessment of customer PRP activity, which can be applied in practice to measure its effectiveness under different brand-image conditions. Andreassen Tor (2008) studied the impact of customers perception of customer service (bad/good) on variables that are known to drive revenue, i.e. customer satisfaction, perceived relative attractiveness, and commitment. Data were collected through a survey among bank customers. Two groups were sampled: customers who have experienced good or bad customer service. The hypotheses were tested by applying structural equation modeling and running two group analysis using the PLS and LISREL softwares. Customers that experience bad customer service do take into account the same variables in their evaluation as do customers that experience good customer service. They do however, put different weights on every factor in the evaluation process. Also the strength of the relationship between the variables seems to differ. Typically, analyses showed that customers experiencing bad customer service tend to consider more thoroughly all aspects of the service; the relationships between the variables were stronger and the explained variance of each construct higher, than in the group of customers experiencing good customer service. However, the paths are not different across the groups. The paper has only tested the model and hypothesis in one industry. Future research should test the same model using different industries reflecting different customer involvement levels. Practical implications from this study, service managers

can learn that investing in customer service in ongoing customer relations is the right thing to do as it is linked to customer equity through customers commitment to the firm. Second, as customer service in such relationships drives perceived relative attractiveness, saving the bottom line by cutting back on the human side of the customer interaction, may harm the firms competitive position in the marketplace.

2.2 EVOLUTION OF INSURANCE

The concept of insurance is believed to have emerged almost 4500 years ago in the ancient land of Babylonia where traders used to bear risk of the carvan by giving loans, which were later repaid with interest when the goods arrived safely. The concept of insurance as we know today took shape in 1688 at a place called Lloyds Coffee House in London where risk bearers used to meet to transact business. This coffee house became so popular that Lloyds became the one of the first modern insurance companies by the end of the eighteenth century. Marine insurance companies came into existence by the end of the eighteenth century. These companies were empowered to write fire and life insurance as well as marine. The Great Fire of London in 1966 caused huge loss of property and life. With a view to providing fire insurance facilities, Dr. Nicholas Barbon set up in 1967 the first fire insurance company known as the Fire office. The early history of insurance in India can be traced back to the Vedas. The Sanskrit term Yogakshema (meaning well being), the name of Life Insurance Corporation of Indias corporate headquarters, is found in the Rig Veda. The Aryans practiced some form of community insurance around 1000 BC. Life insurance in its modern form came to India from England in 1818. The Oriental Life Insurance Company was the first insurance company to be set up in India to help the widows of European community. The insurance companies, which came into existence between 1818 and 1869, treated Indian lives as subnormal and charged an extra premium of 15 to 20 per cent.

The first Indian insurance company, the Bombay Mutual Life Assurance Society, came into existence in 1870 to cover Indian lives at normal rates. The Insurance Act, 1938, the first comprehensive legislation governing both life and nonlife branches of insurance were enacted to provide strict state control over insurance business. This amended insurance Act looked into investments, expenditure and management of these companies. By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and 75 provident societies carrying on life insurance business in India. Insurance business flourished and so did scams, irregularities and dubious investment practices by scores of companies. As a result the government decided to nationalize the life assurance business in India. The Life Insurance Corporation of India (LIC) was set up in 1956. The nationalization of life insurance was followed by general insurance in 1972.

2.3 WHAT IS INSURANCE?

Insurance is a mechanism that ensures an individual to thrive on adverse consequences by compensating the individual, his/her loss financially. Every individual in the world and all activities connected with him/her, be it life, profession, business, travel or any other pursuits are subject to unforeseen and uncalled for hazards or dangers. The benefit that an individual enjoys in his life by owning a car or a house or a factory can be snatched by sudden accident which can render even the individual immobile, and his family vulnerable. At this critical juncture, only insurance helps him not only to survive but recover his loss and continue his life in a normal manner, which would otherwise be unthinkable. The concept of insurance is quite simple. People, who are in similar trade and are exposed to the same risks, congregate and some to an agreement that if any individual member suffer a loss, then the loss will be shared by others and minimized in order to enable the individual member recover from the loss and cover his ground. Similarly the different kinds of risks can be identified and separate groups can be formed to counter such risks and reduce to impact to manageable proportion, in which the share could be

collected from the members either after the loss or in advance, at the time of admission to the group. This is an exemplary sign of humanity and insurance therefore serve the mankind to a great extent; a point most of the individual tend to overlook, since monetary aspect is involved. Now such is for tangible assets. The concept of insurance has been extended beyond the coverage of tangible assets. Exporters run the risk of importers in other country defaulting as well as losses due to sudden fluctuations in the currency exchange rates, economic policies turmoil. The risk are not insured. Doctors run the risk of being charged with negligence and can subsequently liable for damage. The amount in question can be fairly large, beyond the capacity of the individual to bear. These are insured. Thus insurance is extended to intangible assets. In some countries even the voice of a singer , legs of the footballer can be insured, even though the advantage of spread may not be available in these cases. Satisfaction of economics needs requires generation of income from some sources. If the property, which is the source of such income, were lost fully or partially, permanently, or temporarily, the income too would stop. The purpose of insurance is to safeguard against such misfortune few, through the help of the fortune many, who were exposed to the same risk , but saved from the misfortune . Thus the essence of insurance is to share losses substitute certainty by uncertainty. The different types of human activities that come under the umbrella of insurance are as follows: 1. House/office/factory or any moveable object destroyed in life 2. Shipment or transportation of goods by ship, destroyed in catastrophe. 3. Jewellery /cash/ household goods stolen or robbed 4. Goods in transit by roads or railways destroyed. 5. Theft or accident of vehicles -Burglar nsurance -Carrier insurance -Vehicle insurance -Marine insurance - Fire insurance

6. Financial cover in ailment /surgery etc

-Health insurance

All these are non-life insurance. In conclusion one can safely say that the purpose of insurance be it or non-life is to transfer the financial loss to the insurance company who spreads in over to the policyholders.

2.3.1 Life Insurance

Life insurance (Life Assurance in British English) is a type of insurance. As in all insurance, the insured transfers a risk to the insurer. The insured pays a premium and receives a policy in exchange. The risk assumed by the insurer is the risk of death of the insured. 2.3.1.1 How life insurance works There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy (policyholder), although the owner and the insured are often the same person. For example, if John Smith buys a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and he is the insured. The owner of the policy is called the grantee (he or she will be the person who will pay for the policy). Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value. The policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. Special provisions apply, including a suicide clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date (usually two years). Any misrepresentation by the owner or insured on the application is also grounds for nullification. Most contracts have a contestability period, also usually a two-year period; if the insured dies within this period, the insurer has a

legal right to contest the claim and request additional information before deciding to pay or deny the claim. The face amount of the policy is normally the amount paid when the policy matures, although policies can provide for greater or lesser amounts. The policy matures when the insured dies or reaches a specified age. The most common reason to buy a life insurance policy is to protect the financial interests of the owner of the policy in the event of the insured's demise. The insurance proceeds would pay for funeral and other death costs or be invested to provide income replacing the deceased's wages. Other reasons include estate planning and retirement. The owner (if not the insured) must have an insurable interest in the insured, i.e. a legitimate reason for insuring another persons life. The insurer (the life insurance company) calculates the policy prices with intent to recover claims to be paid and administrative costs, and to make a profit. The cost of insurance is determined using mortality tables calculated by actuaries. Actuaries are professionals who use actuarial science which is based in mathematics (primarily probability and statistics). Mortality tables are statistically based tables showing average life expectancies. The three main variables in a mortality table are age, gender, and use of tobacco. The mortality tables provide a baseline for the cost of insurance. In practice, these mortality tables are used in conjunction with the health and family history of the individual applying for a policy in order to determine premiums and insurability. The current mortality table being used by life insurance companies in the United States and their regulators was calculated during the 1980s. There is currently a measure being pushed to update the mortality tables by 2008. The current mortality table assumes that roughly 2 in 1,000 people aged 25 will die during the term of coverage. This number rises roughly quadratically to about 25 in 1,000 people for those aged 65. So in a group of one thousand 25 year old males with a $100,000 policy, a life insurance company would have to, at the minimum, collect $200 a year from each of the thousand people to cover the expected claims. The insurance company receives the premiums from the policy owner and invests them to create a pool of money from which to pay claims, and finance the insurance company's operations. Contrary to popular belief, the majority of the money that insurance companies make

comes directly from premiums paid, as money gained through investment of premiums will never, in even the most ideal market conditions, vest enough money per year to pay out claims. Rates charged for life insurance increase with the insured's age because, statistically, a people are more likely to die as they get older. Since adverse selection can have a negative impact on the financial results of the insurer, the insurer investigates each proposed insured (unless the policy is below a company-established minimum amount) beginning with the application, which becomes part of the policy. Group Insurance policies are an exception. This investigation and resulting evaluation of the risk is called underwriting. Health and lifestyle questions are asked, and the answers are dutifully recorded. Certain responses by the insured will be given further investigation. Life insurance companies in the United States support The Medical Information Bureau, which is a clearinghouse of medical information on all persons who have ever applied for life insurance. As part of the application, the insurer receives permission to obtain information from the proposed insured's physicians. Life insurance companies are never required by law to underwrite or to provide coverage on anyone. They alone determine insurability, and some people, for their own health or lifestyle reasons, are uninsurable. The policy can be declined (turned down) or rated. Rating means increasing the premiums to provide for additional risks relative to that particular insured. Many companies use four general health categories for those evaluated for a life insurance policy. These categories are Preferred Best, Preferred, Standard and Tobacco. Preferred Best means that the proposed insured has no adverse medical history is not under medication for any condition, and his family (immediate and extended) has no history of early cancer, diabetes or other conditions. Preferred is like Preferred Best, but it allows that the proposed insured is currently under medication for the condition and may have some family history. Most people are in the Standard category. Profession, travel, and lifestyle also factor into not only which category the proposed insured falls, but also whether the proposed insured will be denied a policy. For example, a person who would otherwise be in the Preferred Best category will be denied a policy if he or she travels to a high risk country.

Upon the death of the insured, the insurer will require acceptable proof of death before paying the claim. The normal minimum proof is a death certificate and the insurer's claim form completed, signed, and often notarized. If the insured's death was suspicious and the policy amount warrants it, the insurer may investigate the circumstances surrounding the death, before deciding whether there is a legal obligation to pay the claim. Proceeds from the policy may be paid in a lump sum or as an annuity paid over time in regular recurring payments for either for the life of a specified person or a specified time period. 2.3.1.2 Contribution of Life Insurance in Development of Economy Contribution of Life Insurance Sector in the Economy Flow of Insurance Industry in India Structure of insurance industry: Snap Shot Industry Aggregation of long term savings Spread of financial services in rural Areas Long term funds for infrastructure development of capital Markets/ Economic Growth
Employment generation

Special Futures Growth Potential

2.4 LIFE INSURANCE V/S OTHER SAVINGS 2.4.1 Protection

Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with

bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.

2.4.2 Aid to thrift

Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy installment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly). For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary. In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.

2.4.3 Liquidity
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.

2.4.4 Tax Relief

Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.

2.5 INSURANCE IN INDIA

Today insurance industry is one of the most growing sectors in India. There is lot of potential in the Indian Insurance Industry. There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoing developments in the industry after the opening of the sector.

The economy of a country is highly influenced by the Financial System of the country. The Indian Financial System has been broadly divided into two segments: the organized and the unorganized segments. An investor has a wide array of investment avenues available. Economic well being in the long run depends significantly on how wise the investments are. In the present financial scenario where the economy is poised to grow approx. at 9% ,as stated by our Finance Minister P Chidambaram, and the present bulls run in the capital market ,where lot of money is being pumped into the economy by FIIs, and increasing disposable income with the generation next has created a problem of investment because there is lot money on hand but they dont know where to invest as there is significantly less attractive return in the bank FD, PPF, KVP, NSC, MIS, and other Post saving scheme. Uncertainties in share market and low interest rate have left investors puzzled, i.e. to spend the money or save the money. If they want to save the money then where can they save it so that they can get better returns with flexibility, tax benefit and as well as capital appreciation. So it is necessary for investor to find the answer and way of capital growth with better return rather than uncertain share market and other low yield investment avenues. Insurance constitutes one of the major segments of the financial market. Insurance services play predominant role in the process of financial intermediary. Today insurance industry is one of the most growing sectors in India. There is lot of potential in the Indian Insurance Industry. There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoing developments in the industry after the opening of the sector. The major issue right now is the hike in FDI (Foreign Direct Investment) limit from 26% to 49% in the insurance sector. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners. Another major issue is the effects on LIC after the entry of private players in the market. Though market share of LIC has been affected, it has improved in terms of efficiency.

There are number of other hot topics like penetration of Health Insurance, Rural marketing of insurance, new distribution channels, new product ranges, insurance brokers regulation, incentive scheme of development officers of LIC etc. So it offers lot of scope for studying the insurance industry. Right now the insurance industry has great opportunities in a country like India or China which huge population.

CHAPTER-3

INTRODUCTION TO COMPANY

3.1 COMPANY PROFILE

Birla Sun Life Insurance Company Limited is a joint venture between The Aditya Birla Group, one of the largest business houses in India and Sun Life Financial Inc., a leading international financial services organisation. The local knowledge of the Aditya Birla Group combined with the expertise of Sun Life Financial Inc., offers a formidable protection for your future. The Aditya Birla Group has a turnover of close to Rs. 1,19,000 crores, with a market capitalisation of Rs. 1,33,875 crores (as on 31st March 2010). It has over 1,00,000 employees across all its units worldwide. It is led by its Chairman - Mr. Kumar Mangalam Birla. Some of its key companies are Hindalco, Grasim and Aditya Birla Nuvo. Sun Life Financial Sun life financial based in Canada-started in 1865. It operates in all the important markets of the world like Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. Sun Life Financial Inc. has assets under management of over USD 404.7 billion (as on 31st March, 2010). It is a leading performer in the life insurance market in Canada.

Birla Sun Life Insurance (BSLI) has been operating for 11 years. It has contributed significantly to the growth and development of the life insurance industry in India. It pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. It was the first player in the industry to sell its policies through the Bancassurance route and through the Internet. It was the first private sector player to introduce a Pure Term plan in the Indian market. BSLI has covered more than 2 million lives since it commenced operations. And its customer base is is spread across more than 1,500 towns and cities in India. The company has a capital base of Rs. 1,274.5 crores as on 31st March 2010. With an experience of over 11 years, BSLI has contributed significantly to the growth and development of the life insurance industry in India and currently ranks amongst the top 5 private life insurance companies in the country. Known for its innovation and creating industry benchmarks, BSLI has several firsts to its credit. It was the first Indian Insurance Company to introduce Free Look Period and the same was made mandatory by IRDA for all other life insurance companies. Additionally, BSLI pioneered the launch of Unit Linked Life Insurance plans amongst the private players in India. To establish credibility and further transparency, BSLI also enjoys the prestige to be the originator of practice to disclose portfolio on monthly basis. These category development initiatives have helped BSLI be closer to its policy holders expectations, which gets further accentuated by the complete bouquet of insurance products (viz. pure term plan, life stage products, health plan and retirement plan) that the company offers. Add to this, the extensive reach through its network of 600 branches and 1,75, 000 empanelled advisors. This impressive combination of domain expertise, product range, reach and ears on ground, helped BSLI cover more than 2 million lives since it commenced operations and establish a customer base spread across more than 1500 towns and cities in India. To ensure that our customers have an impeccable experience, BSLI has ensured that it has lowest outstanding claims ratio of 0.00% for FY 2008-09. Additionally, BSLI has the best Turn around Time according to LOMA on all claims

Parameters. Such services are well supported by sound financials that the Company has. The AUM of BSLI stood at Rs. 8,165 crs as on February 28, 2009, while as on March 31, 2009, the company has a robust capital base of Rs. 2000 crs. 3.1.1 Achievements of BSLI
1st to introduce ULIP fund options.

1st to launch illustrations so that customers understand the products better before they buy. 1st to issue NAVs of funds for better transparency. 1st to disclose portfolio on a monthly basis. 1st to introduce Free Look Period and the same was made mandatory by IRDA for all other Life Insurance Companies.

3.2 KEY PEOPLE OF ORGANISATION 3.2.1 Board of Directors

Mr. Kumar M Birla Mr. Donald A Stewart, Mr. Bishwanath N Puranmalka Mr. Ajay Srinivasan Mr. Gary M Comerford Mr. Suresh N Talwar Mr. Gian P Gupta His Highness Maharaja G Singh

Mr. Stephan Rajotte Dr. Bharat K Singh

3.2.2 Investment Committee

Mr. B. N. Puranmalka Mr. Eugene Lundrigan Mr. Ajay Srinivasan Mr. Vikram Mehmi Mr. Mayank Bathwal Mr. Fabien Jeudy Mr. Vikram Kotak Ms. Keerti Gupta

3.2.3 Management Team

Mr. Vikram Mehmi -President & Chief -Executive Officer Mr. Mayank Bathwal Mr. Mario Braganza Mr. E.N. Goveia Mr. Amit Punchhi -Chief Financial Officer -Chief Operating Officer -Head - Direct Sales Force -Senior Vice President -Third Party Distribution -Head - Group Life & Pensions

Mr. Bhavesh Sanghvi Mr. Snehal Shah Ms. Anjana Grewal

-Senior Vice President - Operations -Senior Vice President - Marketing & Communications -Senior Vice President - DSF Expansion

Mr. Rajesh Bhojani Mr. K.H. Venkatachalam Mr. Fabien Jeudy Mr. Lalit Vermani Mr. Melvyn D'souza

-Vice President Human Resource -Vice President, Chief & Appointed Actuary -Vice President - Compliance -Vice President Risk Management and Internal Audit -Vice President - Investments

Mr. Vikram Kotak Mr. Bhalachandra Nayak

-Vice President Strategy

3.2.4 Competitors
Life insurance corporation ING vysya life insurance Max network life insurance MetLife insurance Aviva life insurance

 Bharathi Axa life insurance Bajaj Allianz life insurance Tata AIG life insurance ICICI Prudential Life Insurance Reliance life insurance Kotak Mahindra life insurance 3.2.4.1 Competitors in Detail Aviva life insurance: Aviva Life Insurance Company India Pvt. Ltd. is a joint venture between Aviva of UK and Dabur, one of India's leading producers of traditional healthcare products. Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. Bajaj Allianz: Bajaj Allianz is a joint venture between Allianz AG one of the world's largest insurance companies, and Bajaj Auto, one of the biggest 2 and 3 wheeler manufacturers in the world. Bajaj Allianz is into both life insurance and general insurance. Allianz Group is one of the world's leading insurers and financial services providers. Founded in 1890 in Berlin, Allianz is now present in over 70 countries HDFC Standard Life Insurance Co. Ltd: is a joint venture between HDFC Ltd., India's largest housing finance institution and Standard Life Assurance Company, Europe's largest mutual life company. It was the first life insurance company to be granted a certificate of registration by the IRDA on the 23rd of October 2000. ING Vysya Life Insurance Company Limited: is a joint venture between Vysya Bank and ING Group of Holland, the world's 4th largest financial services group, with presence across 50 countries, and a heritage of over 150 years.

 Kotak Mahindra Old Mutual Life Insurance Ltd: is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's leading financial institutions and offers a range of financial services such as commercial banking. Life Insurance Corporation of India: (LIC) is an autonomous body authorized to run the life insurance business in India with its Head Office at Mumbai. It has been established by an act of the Parliament and started functioning from 1/9/1956. ICICI Prudential Life Insurance : ICICI Prudential life insurance is a part of ICICI Bank. Max New York Life Insurance Company Limited is a joint venture between Max India Limited, a multi-business corporate, and New York Life International, a global expert in life insurance. New York Life is a Fortune 100 company that has over 160 years of experience in the life insurance business. MetLife India Insurance Co. Pvt Ltd is a joint venture between MetLife Group and its Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu. Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 per cent shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio. SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life Insurance is registered with an authorized capital of Rs 500 crore and a paid up capital of Rs 350 cores. Tata AIG Life Insurance Company Limited is a joint venture between Tata Group and American International Group, Inc. (AIG). Tata Group is one of the oldest and leading business groups of India. Tata Group has had a long association with India's insurance

sector having been the largest insurance company in India prior to the nationalization of insurance. The Late Sir Dorab Tata was the founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in 1919. Shriram Life Insurance Company Ltd is a joint venture between the Chennai-based Shriram Group and the South African insurance major Sanlam. The company launched its operation in India in December 2005.

3.3 SWOT ANALYSIS 3.3.1 Strength:

Multi-channel distribution and one of the largest distribution networks in India. Implementing Six-Sigma process. Customer centric products and services. Superior investment and risk management framework 1 Million Policies sold within 3 and half years. Company has maximum number of MDRT as well as good number of HNI advisors. Training process of the company is very strong. Different plan for different peoples. According to the change in surrounding environment like changes in customer requirement.

3.3.2 Weakness:
COMPANY does not penetrate on the rural market at a time.

 There is no plan for the low income group. Fees for the advisor is high than the other company.

3.3.3 Opportunity:
Insurance market is very big, where company can expand its horizon in insurance industry. Through good investment and insurance it is easy to top Indian customers. The huge insurance market (77%) is left so company has opportunity to expand our products. To associate with the more number of HNI.

3.3.4 Threats:
OLD HABITS DIE HARD: Its still difficult task to win the confidence of public towards private company. The company is facing major threats from LIC -which is an only government company. Plans for all income groups are not available which can create adverse effect later on the market share of the company.

3.4 DETAILS OF PRODUCTS

Life is unpredictable. But in face of adversity, our responsibilities towards our parents, children and loved ones need not be compromised. Insurance planning equips you to smooth out the uncertainties and adversities that life might send your way, so that the best

that life has to offer, secure in the knowledge that your beloved ones are well provided for. BSLI offers a complete range of insurance products. 1. Protection Plans 2. Savings Plans 3. Child Plans 4. Investment Plans 5. Retirement Plans 6. Group Plans 7. Rural Plans

3.4.1 Insurance Plans

BSLI offers Lifeguard - a set of pure protection plans. Choose from amongst three different product structures to insure your life and provide total security to your family, at a very affordable cost. 3.4.1.1 Level Term Assurance with return of premium On death the entire sum assured will be paid. On maturity, all the premiums paid will be returned. 3.4.1.2 Level Term Assurance without return of premium On death the entire sum assured will be paid. No survival or maturity benefits. You can also enhance the above two policies by adding Accident & Disability Benefit Rider and Waiver of Premium Rider (WOP)

3.4.1.3 Level Term Assurance - Single premium: On death the entire sum assured will be paid. No survival or maturity benefits.

3.4.2 Protection Plans

BSLI offers a variety of policies that give you the benefits of protection and the opportunity to save for important assets or events, like a home, a car or a wedding. A regular premium unit-linked insurance plan with an assurance of Capital Guarantee# with the added advantage of flexible liquidity option. An ideal plan for long term planning with the benefit of liquidity.

The key features of the plan are: Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium. You can also choose the term of the plan. At the end of the term, the higher of the value of units or the guaranteed value is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable. Facility to make withdrawals from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units. Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.

 Additional insurance for 10 years after the maturity, for an amount of 50% of the Sum Assured

3.4.3 Savings Plans

Flexibility to make additional investment with the help of the top-up facility. Flexibility to increase / decrease your annual premium Amount Facility of Automatic Premium Payment- With this facility you can take a temporary break from premium payment. Total transparency with the premium allocations, and other charges declared upfront. The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests. With Automatic Premium Payment facility, you can avail a temporary break from premium payment for a maximum of 1 year. This facility is available once if the premium paying term is less than 15 years and twice, if it is 15 years or more. You can also enhance your policy by adding Accident & Disability Benefit Rider , Waiver of Premium Rider and Critical Illness Rider. A regular premium unit-linked insurance plan with an assurance of Capital Guarantee# An ideal plan for your long-term savings and protection requirement. The key features of the plan are: Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium. You can also choose the term of the plan. At the end of the term, the higher of the value of units or the guaranteed value is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit.

 Additional insurance for 10 years after the maturity, for an amount of 50% of the Sum Assured. Flexibility to make additional investment with the help of the top-up facility. Flexibility to increase / decrease your annual premium amount Facility of Automatic Premium Payment- With this facility you can take a temporary break from premium payment. Total transparency with the premium allocations, and other charges declared upfront. The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests. With Automatic Premium Payment facility, you can avail a temporary break from premium payment for a maximum of 1 year. This facility is available once if the premium paying term is less than 15 years and twice, if it is 15 years or more. The capital guarantee is applicable only on the invested premium and the declared bonus interests. You can also enhance your policy by adding Accident & Disability Benefit Rider, Waiver of Premium Rider and Critical Illness Rider. A unit-linked insurance plan with an assurance of Capital Guarantee which offers you the benefit of a limited premium payment term. An ideal plan for protection with wealth creation that offers the flexibility of a limited premium paying term. Flexibility to choose a premium payment term of 5, 7 or 10 years for a maturity term of 10, 15 or 20 years respectively. Flexibility to choose a specific level of protection (Sum Assured), based on a multiple of the annual premium. At the end of the term (maturity), the higher of the value of units or the guaranteed value is paid. On death, Sum Assured along with the higher of value of units or the guaranteed value is payable.

 Additional credits payable as a percentage of the initial annual premium are paid along with the death or maturity benefit. Facility to make withdrawals from the 6th policy year onwards till the end of the policy term. Every year withdraw up to 10% of the value of units Flexibility to make additional investment with the help of the top-up facility. Flexibility to increase / decrease your annual premium amount
Total transparency with the premium allocations, and other charges declared upfront.

The guaranteed value of the unit fund is the value of all invested premiums (premiums net of all charges) along with the declared bonus interests. The capital guarantee is applicable only on the invested premium and the declared bonus interests. You can also enhance your policy by adding Accident & Disability Benefit Rider and Critical Illness Rider. Presenting Premier Life The Preferred plan for the Preferred Customer. The key features of the plan are: Limited premium payment option: Choose from among a 3, 5, 7 or 10 year premium paying term. Choice of sum assured: Choose a sum assured, which is a minimum multiple of 1 and a maximum multiple of 25 times the annual contribution. Additional allocation of units on a periodic basis. Facility to top-up your investment any time you have surplus funds. Choose from among four funds, based on your investment objective and risk appetite. Flexibility to decrease your sum assured. Add-on riders to protect you against any eventuality.

 Loans against the policy. You can also enhance your policy by adding Critical Illness Rider, Accident & Disability Benefit Rider. Presenting Life Time unit linked plans that meet your changing needs over a lifetime. These solutions have been developed to meet your savings, protection and investment needs at every stage in life.

Protection Choose a specified level of protection (available only with Lifetime). Two levels of Sum Assured to choose from (available only with Lifetime II). Flexibility to increase or decrease your sum assured. Add-on riders to protect you against any eventuality. Savings Flexibility to increase or decrease your contribution. Facility of Premium Holiday, wherein the policy continues even if there is a temporary break in the payment of annual contribution (available only with Life Time). Facility of Automatic Cover Continuance, wherein the policy continues even if there is a temporary break in the payment of annual contribution Facility to top-up your investment any time you have surplus funds. Additional allocation of units on a periodic basis. Loans against the policy.

Investment Choose from among four funds, based on your investment objective and risk appetite. Choice to switch between investments options (4 free switches every policy year). You can also enhance your policy by adding Critical Illness Rider, Major Surgical Assistance Rider, Accident & Disability Benefit Rider, Accident Benefit Rider (available only with Life Time) and Waiver of Premium Rider. An insurance plan that gives added protection, savings and multiple options, all in one! The flexibility to choose your premium contribution. The flexibility to choose amongst three levels of cover (in the form of sum assured) for the same amount of total annual contribution. The flexibility of shifting between the three levels of cover, as you require. The flexibility of receiving your maturity proceeds as a lump sum or in equal annual installments over 3 or 5 years. You can also enhance your policy by adding Variety of Riders An insurance plan that gives you added protection, savings, multiple options, plus the power of liquidity. The flexibility to choose your premium contribution. The flexibility to choose amongst three levels of cover (in the form of sum assured) for the same amount of total annual contribution. The flexibility of shifting between the three levels of cover, as you require. The flexibility of receiving your maturity proceeds as a lump sum or in equal annual installments over 3 or 5 years. The flexibility of withdrawing up to 10% of the accumulated value of your policy, after the first 5 policy years.

You can also enhance your policy by adding Variety of Riders An ideal plan for those who want to accumulate funds on a regular basis while enjoying insurance protection. Guaranteed Benefits: Guaranteed additions @ 3.5% of the Sum Assured, compounded annually for the first 4 years of the policy. Extended Life Cover: An extended cover for 5 years after the maturity of the policy, for 50% of the sum assured, at no extra cost. Maturity Benefit: At the end of the term, the policyholder receives the full sum assured, the guaranteed additions and the vested bonuses. Death Benefit: The beneficiary receives the sum assured, the guaranteed additions and the vested bonuses in case the life assured were to meet with an unfortunate event. In case the life assured is aged 7 years or less, the basic premium paid will be returned. You can also enhance your policy by adding Critical Illness Rider, Major Surgical Assistance Rider, Accident & Disability Benefit Rider, Waiver of Premium Rider (WOP) As a responsible parent, you will always strive to ensure a hassle-free, successful life for your child. However, life is full of Uncertainties and even the best-laid plans can go wrong. Heres how you can give your child a 100% safe and assured tomorrow, whatever the uncertainties. Smart Kid is especially designed to provide flexibility and safeguard your childs future education and lifestyle, taking all possibilities into account. Choose from amongst a basket of 4 plans: Smart Kid regular premium Smart Kid unit-linked regular premium Smart Kid unit-linked regular premium II Smart Kid unit-linked single premium II

3.4.4 Child Plans

All these plans offer you:

 Financial Benefits: Regular payments at critical stages in your childs life, like Board examinations, Graduation and Post-graduation. Total peace of mind, even if you are not around Sum Assured is paid immediately: Ensures that your loved ones stay financially secure, even in your absence. All future premiums are waived: Ensuring that your family is not financially burdened in your absence. Policy benefits continue: The educational benefits of the policy continue, ensuring that your child can realize his or her dreams without any hassles. Development Allowance: Smart Kid guarantees regular income to secure your childs educational career and also ensures his or her all-round development, for a nominal additional amount. The Income Benefit Rider takes care of this through an annual payment of 10% of the sum assured, to your child, till the maturity of the policy, in the unfortunate event of the death of the parent. All Smart Kid plans can be enhanced with the Accident & Disability Benefit Rider and Income Benefit Rider . You can also an Accident Benefit Rider to a Smart Kid Regular Premium policy, and a Waiver of Premium Rider (WOP) to Smart Kid unit-linked regular premium policy. Life Link II is a unique plan that combines the security of a life insurance policy with the opportunity of enjoying high returns on your investments, without the market risks compromising on the protection of your family! Death Benefit: The Sum Assured under the product has 2 options, either 500% of the initial premium or 105% of the initial premium. In the event of an unfortunate death, the beneficiary will receive higher of the value of units or the initial death benefit, less any withdrawals. Withdrawal Benefit: One can make partial withdrawals from the accumulated value of the policy after completion of one policy year.

Flexibility: Choose from four fund options, based on your investment objective and risk appetite. If at a later stage your financial priorities change, you can switch between the various fund options, absolutely free, 4 times a year.

3.4.5 Investment Plans

Life Expectancy has been rising rapidly and today you can expect to live longer than your earlier generations. For you, this increase will mean a longer retirement life, stretching into a couple of decades. BSLI Retirement Solutions that combine the best of insurance and investment. These solutions are developed to ensure your peace of mind for the years to come. 1. Why plan for retirement? 2. How much should I set aside for retirement? 3. The impact of inflation on your retirement savings 4. Why plan early? 5. About Annuities

3.4.6 Retirement Plans

Why plan for retirement? For too many people, the joy of retirement after years of hard work is eclipsed by the financial uncertainties that it brings. Despite all the planning and saving, you can never sure whether your money will last a lifetime. Retirement planning offers a way to ensure a more enjoyable, stress free tomorrow. A prudent plan will ensure that increasing life expectancy, higher inflation and increasing taxes do not eat away into your hard earned savings. How much must I set aside for retirement?

To ensure a comfortable retired life, you would be wise to invest money into additional avenues like pension plans. How much you need to invest can be answered by answering some questions such as: 1. How long do you have to save that amount before retirement? 2. Where can you invest your retirement money? 3. How much risk are you willing to take on your investments? In an era of competitive parity, the only asset that makes a decisive difference between corporate success and failure is the quality of human capital. Employee benefits have proven to be an excellent tool to optimize the retention of talent and improve an organizations bottom-line. The quality of an organizations employee benefits establishes and maintains a company's image as a caring employer. Optimum care of employees is a long-term investment that results in a sustained competitive advantage for an organization in the times to come.

3.4.7 Group Solutions

BSLI Group Solutions Advantage: An integrated basket of employee benefits solutions that offer incomparable flexible benefits. Sound investment management that focuses on safety, stability and profitability of the portfolio. Personalized financial planning for your employee that takes care of his/her changing financial needs at every stage of life. Quality service initiatives and transparency across all operations, promising superlative operational efficiency. Group Term Assurance: Helps provide affordable cover to members of a group.

Group Gratuity Plan: Helps employers fund their statutory gratuity obligation in a flexible and hassle-free manner. Group Superannuation Plan: A flexible scheme (defined benefit and defined contribution) to provide a retirement kitty for each member of the group. 3.4.7.1 Group Term Assurance: BSLI flexible group term solution helps provide affordable cover to members of a group. The cover could be uniform or based on designation/rank or a multiple of salary, and can be extended to all employees between the ages of 18 and 65 years. The benefit under the policy is paid on the event of the members death to the beneficiary nominated by the member. It is a one-year renewable policy where one master policy covers all proposed employees comprising the group, with a minimum group size of 25 persons. New members can join the group and outgoing members can leave the group at any point during the policy term. Highlights include: Greater convenience for the employees with relaxed underwriting and medical requirements. "Free Cover Limits" with simplified underwriting depending upon the number of employees in the group and the level of cover chosen. Guaranteed benefit: On death during the term of the contract (while in Service), the sum assured will be paid to the beneficiary of the employee. Choice of additional coverage in form an Accident and Disability Benefit Rider and Critical Illness Cover Premium is viewed as a business expense in the year of payment. 3.4.7.2 Group Gratuity Plan:

BSLI group gratuity plan helps employers fund their gratuity obligation in a scientific manner. Employers can avail of the tax benefits as applicable to approved gratuity funds. The plan can also be customized to structure schemes that can provide benefits beyond the statutory obligations. Highlights include: Wider choice of investments with Market Linked Plans - to meet the diverse financial goals. We offer 4 investment options (short-term debt, debt and balanced and capital guarantee plan) where investments will be made in accordance with the fund objectives. Transparency through Daily disclosure of Unit Value and regular disclosure of the portfolio of each of the investment option Flexibility through switching and contribution redirection option to enable reshuffling of portfolio Bundled Life Cover greater value to the employee by packaging life insurance covers with the gratuity, with minimal amount of underwriting. Actuarial services to provide a scientific estimation of the gratuity liability. Low explicit charge structure with the conditions for exit specified upfront. Enhanced service levels through faster claim settlement, easier access to information and regular statements. Complete end to end solution in the legal and regulatory approval process for scheme set up or transfer. Employee Benefits: The contribution made by the employer is not included in the value of taxable perquisites in the hands of the employee. Gratuity received up to Rs 350000 is exempt from Income tax under Sec 10(10)

 Annual contribution up to 8.33% of salary bill in a financial year is allowed a deduction for the purpose of computation of profits and gains of business. Contribution towards past service liability is allowed as deduction as per the Income Tax rules.

3.4.7.3 Group Superannuation Plan: BSLI Superannuation Scheme (for both Defined Benefit and Defined Contribution funds) offers substantial benefits to both employers and employees. The employer and employee can avail of tax benefits applicable to an approved superannuation trust. The scheme will provide for a retirement fund for each participating employee. An employee would be able to choose from various annuity options or opt for partial commutation of corpus at retirement. Highlights include: Wider choice of investments with Market Linked Plans to meet the diverse financial goals. We offer 5 investment options (short-term debt, debt, balanced, growth and capital guarantee plan) where investments will be made in accordance with the fund objectives. Control - Each member/employer can exercise greater control over investments by choosing one or more of the investment options. Multiple Annuity Options - 5 annuity options and open market option Transparency - Transparency through Daily disclosure of Unit Value and regular disclosure of the portfolio of each of the investment option Flexibility - Flexibility through switching and contribution redirection option to enable reshuffling of portfolio Low explicit charge structure with conditions for exit specified upfront.

 Enhanced service levels through faster claim settlement, easier access to information and regular statements. Complete end to end solution in the legal and regulatory approval process for scheme set up or transfer BSLI Rural Products are designed to meet the needs of the rural consumers. These products offer the following features: 1. Low and Affordable Premiums 2. Life Cover 3. Savings Option 4. Hassle free procedure

3.4.8 Rural Plans

BSLI offers 2 specially designed rural plans. a) BSLI Endowment Plan b) BSLI - Regular Premium BSLI Endowment Plan: BSLI offers the following features: Life Cover and Savings Regular Premiums Age at entry 18 - 45 Yrs Premium Mode Half Yearly / Yearly Term 5,10,15 Yrs Sum Assured Rs.5,000 -20,000 Premium / Year Rs. 507 - 553 ( SA: Rs.10,000)

 Maturity/Death benefit Sum Assured BSLI - Regular Premium: BSLI is a regular premium policy with the following features: Individual policy Only Life cover Term - 3 & 5 Yrs Age independent premium Age at entry 18 - 45 Yrs Sum Assured Single Premium / Year Rs 50 200 Maturity/Death benefit Rs.5,000 - 20,000 Death Benefit Sum Assured

3.5 IRDA
The insurance sector has been opened up in India, as there was an urgent need. The international experience indicates those country with a liberalized insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. This happened in China, Malaysia and Singapore where a competitive market has led to improvement in Services and quicker settlement of claims. It is also important to note that competition will bring about advancement in information, communication and technology. And rightly therefore a decision was taken by the Government of India to open up Insurance sector. The establishment of IRDA in the month of April 2000 has been important development in this direction, making the end of monopoly in the insurance sector.

3.6 WHY INSURANCE IN INDIA

Only 22% of the insurance population has been extended cover. Market penetration is low and the potential to exploit is high. Insurance premium per capita is very low. Lack of comprehensive social system benefit and welfare means that demand for pension products is high. Huge middle class of approximately 300 Million. Existing insurance company score low on customer service front. The insurance market registered growth in the Asian region even though Indias share in global insurance is less than 0.5% (1988) as compared to USA (24.2%) and Japan (21%). Studies have revealed that in an emerging market, as disposable income rises, Insurance premiums as a ratio of GDP shoots up. The confederation of Indian Industry projected a growth of Life Insurance premiums from Rs.350 Billion at present to Rs.140 Billion. The Growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% is tapped by the existing insurer. Insurance even more than banking is a volume game. A very exclusive approach in view is unlikely to provide meaningful numbers. Currently, insurance is bought for the purpose of tax-benefits. A higher percentage of business is in the rural market. The share of rural new Business insurance total new business is 55% in terms of policies and 47% in terms of sum assured. However, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, private insurers will be best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60 Products and GIC has more than 180 Products? Not only there is a reduction in the premiums of Life Insurance products have long overdue since Indian morality rate has decreased three folds in the last 50

years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is considered profitable, cross subsidizes other departments. Tariffs reduction is likely to reduce profits; further insurers have to institute proper claims management progress in order to extract efficiencies. At present life insurance business in the country is taxed at 12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to produce or technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world market. First Banking food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute. In other market notably Europe; this has resulted in bank assurance. Bank entering into the insurance business in India to bank hope to maximize expensive existing network by selling a range of products more of a loss alliance between insurance and bank than a formal ownership. Some Indian entrants like ICICI, HDFC and Reliance hope to ride their existing network and customer bases.

CHAPTER-4

DATA ANALYSIS AND INTERPRETATION

4.1 DATA ANALYSIS AND INTERPRETATION

1.Which Birla life plan do you have? Table 4.1 : Types Of Plan Types of plan Life insurance plan Health insurance plan Retirement plan Total No of respondent 68 10 22 100 Figure. 4.1 : Types Of Plan Percentage 68% 10% 22% 100%

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

2.Are you satisfied with the plan you have? Table 4.2 : Satisfaction With The Plan People satisfied with plan Yes No Total No of respondent 72 28 100 Figure 4.2 : Satisfaction With The Plan Percentage 72% 28% 100%

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

3.Are you satisfied with the service provided by the company about new schemes and plans?
Table 4.3 : Satisfaction With The Services Of The Company

Are people satisfied with service provided by company Yes No Total

No of respondent 82 18 100

Percentage 82% 18% 100%

Figure 4.3 : Satisfaction With The Services Of The Company

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

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

Table 4.4 : People Want To Investment More In BSLI People want to investment more in BSLI Yes No Total No of respondent 67 33 100 Percentage 67% 33% 100%

Figure 4.4 : People Want To Investment More In BSLI

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

5.Number of people have other insurance plan apart from BSLI Table 4.5 : People Having Other Insurance Plan Apart From BSLI People having other insurance plan apart from BSLI Yes No Total 78 22 100 78% 22% 100% No. of people Percentage

Figure 4.5 : People Having Other Insurance Plan Apart From BSLI

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

6.Percentage share of different companies in insurance sector Table 4.6 : Share of Different Companies Name of different companies Life Insurance Company Birla Sun Life Insurance Bajaj Aliyanz ICICI Other Total Percentage 60% 9% 11% 8% 12% 100%

Figure 4.6 : Share of Different Companies

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

7.Market share of private companies Table 4.7 : Market Share of Private Companies List of companies ICICI pru Bajaj Alliaz SBI HDFC standard Birla sun life insurance Reliance life Max new York Tata AIG Aviva Kotak Mahindra Met life ING vysya Shriram life Other Total Percentage 22.1% 13.8% 9.8% 7.7% 7.0% 8.0% 8.0% 7.0% 3.1% 3.6% 5.3% 2.1% 1.1% 1.1% 100%

Figure 4.7 : Market Share of Private Companies

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

CHAPTER-5

FINDINGS OF THE STUDY

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

CHAPTER-6

SUMMERY AND CONCLUSION

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

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

6.3 LIMITATIONS
Some of the respondents were not cooperative. There are chances of biased information provided by the respondents.

As the sample size is small compared to the total population, therefore there cant be full accuracy. The time was limited. Area was limited.

BIBLIOGRAPHY

BIBLIOGRAPHY

Books:

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

Websites:

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

Journals:

Lect. D.Ramkumar(2003), Relationship Marketing The new tantra for life insurance sector. Department Of Management Studies, N.M.S.S. Vallaichamy Nadir College, Nagamalai, Madurai 625019 available at http://www.google.co.in/interstitial? url=http://www.indiaschools.com/marketing_029.htm last accessed on 07-08-2011.

Dr. Ch.Rajesham (2004), Changing scenario of India insurance sector, Department of Commerce & Business Management, University P G College, Kakatiya University Khammam, Andhra Pradesh available at http://www.insuranceinstituteofindia.com/insuranceinst/publication/uploads/journaljan-jun-04/chapter10..pdf last accessed on 14-08-2011

J.Mehra (2005), Innovations in life insurance industry, The financial express, New Delhi available at http://www.financialexpress.com/news/innovations-in-lifeinsurance-industry last accessed on 15-08-2011

ANNEXURE

Questionnaire

Name:............................... Age:.. Occupation:.. 1. Which Birla Sun Life Scheme do you have? Health Retirement Life Health Retirement Life

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

3. What attract you towards Birla Sun Life Plans? (a) (b) (c) (d) 4. Are you satisfied with the services provided by the company regarding new plans and schemes?

(a) Yes

(b) No

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

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

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

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

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

Suggestions: