A REPORT ON

CUSTOMER BEHAVIOR WITH RESPECT OF IDBI FEDERAL LIFE INSURANCE PRODUCT

By Madhukar Rai 12BSP2184

IDBI federal Life Insurance co. ltd

A REPORT ON CUSTOMER BEHAVIOR WITH RESPECT OF IDBI FEDERAL LIFE INSURANCE PRODUCT By Madhukar Rai 12BSP2184

IDBI federal Life Insurance co. Ltd

A report submitted in partial fulfillment of the requirements of PGPMprogram of IBS Pune

SUBMITTED TO

Prof. Gopinath Pillai

FACULTY GUIDE

Mrs Shanthi Yagyanath

COMPANY GUIDE

Date of submission:-

AUTHORIZATION

I hereby declare that this project work titled CUSTOMER BEHAVIOR WITH RESPECT OF IDBI FEDERAL LIFE INSURANCE PRODUCT embodies the original work done by me at IDBI federal Life Insurance co. Ltd during my Summer Internship Program in 2013. The project report is being submitted as partial fulfilment of the requirement of PGPM Program of IBS GURGAON. The findings and conclusions expressed in this report are genuine and for academic purpose. This work in part or full has not been submitted to any other University.

MADHUKAR RAI Enrollment No. 12BSP2184 (IBS GURGAON)

ACKNOWLEDGEMENTS
The successful realization of this project is an outgrowth of consolidated efforts of people from disparate fronts. I express my sincere thanks to the management members of IBS GURGAON, for giving me an opportunity to learn, grow, and widen the horizon of my knowledge and inculcate the spirit of dedication to the purpose.

I would like to extend my heartiest thanks to Mrs Shanthi Yagyanath (Additional Branch Head), who gave an opportunity to work under her in IDBI Federal

I would also wish to express my gratitude to Prof. Gopinath Pillai (FACULTY GUIDE) Faculty In-Charge, for not only being a guide, but also a mentor and her tireless support and guidance in the course of my project and its completion.

MADHUKAR RAI Enrollment No. 12BSP2184 (IBS GURGAON)

TABLE OF CONTENTS Abstract 1. Industry Profile 1.1 Origin of the Insurance Sector 1.2 Impact of Liberalization 1.3 The Working of Insurance Company 1.4 Current Scenario of the Industry 1.5 Global Players in Insurance 1.6 Overview of Indian Insurance Sector 1.7 Future Outlook of Indian Insurance Sector 2. Company Profile 2.1 Company History 2.2 Present Company Profile 2.3 About Sponsors of the Company 2.4 Product Portfolio 2.5 Competition Analysis 4. SWOT Analysis of the Company 5. Objective 6. Methodology 7. Scope of the Study 8. Limitations of the Study 9. Data Analysis and Interpretation 10. Findings 11. Recommendations 12. Conclusion 14. References 15. Annexure

CHAPTER 1 INDUSTRY PROFILE

1.1 INDUSTRY PROFILE

With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7% to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes. The competition LIC started facing from these companies were threatening to the existence of LIC. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. The Indian Life Insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market.

Insurance Sector Reforms

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor was formed to evaluate the Indian insurance industry and give its recommendations. The committee came up with the following major provisions

 Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the industry. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Only one State Level Life Insurance Company should be allowed to operate in each state. It was after this committee came into effect the regulatory body for insurance sector was formed with the name of IRDA. Insurance Regulatory and Development Authority (IRDA): The IRDA since its incorporation as a statutory body has been framing regulations and registering the private sector insurance companies. IRDA being an independent statutory body has put a framework of globally compatible regulations.

1.2 Impact of Liberalization

The introduction of private players in the industry has added to the colours in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 63.95 %( 2010-11) and now it is further decreasing.

1.3 THE WORKING OF INSURANCE COMPANY

Profit = Earned Premium + Investment Income Incurred Loss Underwriting expenses

Insurers make money in two ways:

1. Through Underwriting, the processes by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks, and 2. By investing the premiums they collect from insured. Revenue = Premium Expenses = (Sum of Claims + Commission payable on procurement of business + Operating expenses) Operating Surplus = (Revenue Expenses)

Net investment income includes income from trading in and holding stock market securities including government securities, special deposits with the central government, loans to several public utilities and service providers in state government. Insurance premium collected is converted in a pool of fund then divided in to four expenses: To pay the expenses of the management To pay agency commission To pay for the claims Surplus money will be invested in govt. securities

1.4 Current Scenario of the Industry

India with about 200 million middle class household shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the market. Innovative products and aggressive distribution have become the say of the day. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. Life insurance industry is waiting for a big growth as many Indian and foreign companies are waiting in the line for the green signal to start their operations. The Indian consumer should be ready now because the market is going to give them an array of products, different in price, features and benefits. How the customer is going to make his choice will determine the future of the industry.The private insurance players have significantly improving their market share when compared to 50 years Old Corporation (i.e. LIC).

1.5 Global Players in Insurance

American International Group(AIG) Country: United States Market Value: $172.24 billion American International Group, Inc. (AIG), a global leader in insurance and financial services,is the leading international insurance organization with operations in over 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers throughout the world largest property and casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is traded on the New York Stock Exchange and the stock exchanges in Paris and Tokyo.

AXA Group Country: France Market Value: $66.12 billion In 1980, AXA did not exist. Over the next 20 years, the group would become a great international success with his running player.AXA external growth strategy: a consolidation of the ongoing operations of AXA, buying 50% stake in AXA Oyak, 2nd turkish Insurer, for $ 525 million and the prevalence of high growth potential through the acquisition of 100% of 3rd Mexican insurer ING Seguros (which amounts to 1.5 billion dollars). Today AXA takes place in geographically diverse markets, with operations concentrated in Europe, North America and Asia.

Allianz Worldwide Country: Germany Market Value: $65.55 billion

The Allianz Group is a leading provider of integrated services across the financial world. With about 155,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. Insurance on the side, Allianz is the market leader in the German market and has a strong international presence

Manulife Financial Country: Canada Market Value: $50.52 billion Manulife Financial is a leading Canadian financial services group serving millions of customers in 22 countries and territories around the world. We provide financial protection and wealth management products and services, to individual and group customers in Canada, the United States and Asia. These products and services include individual life insurance, group life and health insurance, long term care services, pension products, annuities, mutual funds and banking products. We offer reinsurance services specializing in retrocession life and property and the victim of reinsurance, and to provide management services of the Company and segregated fund assets and mutual funds and institutional clients.

Generali Group Country: Italy Market Value: $45.45 billion The Generali Group is one of the most important participants in the global insurance and financial products on the market. Group is leader in Italy and Assicurazioni Generali, founded in Trieste in 1831, is the parent company and main operating company. In recent years, the Group achieved a significant return to central-eastern European markets and has established offices in key markets of the Far East, including China and India

Prudential Financial

Country: United States Market Value: $39.70 billion Prudential Financial, Inc. (NYSE: PRU), a leading financial services firm with approximately $ 580 billion in assets under management at June 30, 2009, has operations in the United States, Asia, Europe and Latin America. In its heritage of life insurance and asset management, Prudential is focused on helping approximately 50 million individual and institutional customers grow and protect their wealth.

MetLife Country: United States Market Value: $37.94 billion MetLife, Inc. is a leading insurance and other financial services to millions of individual and institutional customers in the United States. Outside the U.S., the MetLife companies have direct insurance operations in Asia, Latin America and Europe.

Aviva Country: United Kingdom Market value: $33.10 billion Aviva is a leading provider of life and pension products in Europe and are growing long-term savings businesses in Asia and the United States. Their main activities are long-term savings, fund management and general insurance

Munich Re Group Country: Germany Market Value: $30.99 billion Munich Re Group is one of the vectors of global risk. These activities cover the entire value chain of insurance and reinsurance.

AEGON Country: Netherlands Market Value: $26.40 billion AEGON is an international company, providing life insurance, pensions and other long-term savings and investment products to millions of customers worldwide. The company has significant operations in the United States, the Netherlands and the United Kingdom and other companies in Asia, America and other parts of Europe. AEGON is listed on stock exchanges in Amsterdam, London, New York and Tokyo.

1.6 Overview of Indian Insurance Sector

Indian insurance sector has remained on rails even in the toughest of the times, thanks to the Insurance Regulatory and Development Authority (IRDA)'s tough and conservative apparatus. A sound insurance segment ensures better economic development as indicated by a study which states that 1 per cent increase in insurance penetration leads to 13 per cent reduction in uninsured losses and 22 per cent reduction in taxpayers' contribution to recovery following a natural catastrophe. Keeping pace with international happenings, Indian insurance industry has remained in a good health and maintained absolute transparency and highest standards of corporate governance. Assets under management (AUM) of the Indian insurers are slated to touch Rs 20 trillion (US$ 376.51 billion) while the general insurance sector is anticipated to grow 18 per cent in 2012-13, said J Hari Narayan, Chairman, IRDA. He further reported that the insurance sector has grown substantially over the last few years, with its AUM from Rs 8 trillion (US$ 150.57 billion) in 2008 to Rs 18 trillion (US$ 338.82 billion) in 2011-12.

Key Statistics
Life insurance companies have registered a growth of 4 per cent in the first three quarters of financial year 2012-13. The total premium collection from the individual segment by 24 life insurers stood at Rs 40,688 crore (US$ 7.66 billion) in AprilDecember 2012 as against Rs 39,131 crore (US$ 7.36 billion) in the corresponding period last year. Public sector insurer Life Insurance Corporation of India (LIC) recorded 11.3 per cent growth in the retail segment, with collection of Rs 28,017 crore (US$ 5.27 billion) during April-December 2012 while private sector insurers' collection from individual segment stood at Rs 12,671 crore (US$ 2.38 billion). IRDA reported that insurance density came out be US$ 49 while insurance penetration stood at 4.1 per cent in 2011. The measure of insurance penetration and density reflects the level of development

of insurance sector in a country. While insurance penetration is measured as the percentage of insurance premium to the gross domestic product (GDP), insurance density is calculated as the ratio of premium to population (per capita premium)

CHAPTER 2 COMPANY PROFILE

2.1 COMPANY HISTORY

IDBI FEDERAL Life insurance co. ltd. is one of the major players in the insurance market. it is a joint-venture of IDBI Bank which is Indias premier development and commercial bank, Federal Bank which is one of Indias leading private sector banks and Ageas which is a multinational insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and Ageas own 26% equity each. At IDBI Federal, we endeavour to deliver products that provide value and convenience to the customer. Through a continuous process of innovation in product and service delivery we intend to deliver world-class wealth management, protection and retirement solutions to Indian customers. Having started in March 2008, in just five months of inception IDBI FEDERAL Life insurance co. ltd became one of the fastest growing new insurance companies to garner Rs. 100 Cr in premiums. The company offers its services through a vast nationwide network across the branches of IDBI Bank and Federal Bank in addition to a sizeable network of advisors and partners. As on April 30th 2011, the company has issued over 2.94 lakh policies with over Rs. 16, 499 Cr in sum assured

INTODUCTION TO IDBI BANK

The Industrial Development Bank of India Limited, now more popularly known as IDBI Bank, was established as a wholly-owned subsidiary of Reserve Bank of India. The foundation of the bank was laid down under an Act of Parliament, in July1964. The main aim behind the setting up of IDBI was to provide credit and other facilities for the Indian industry, which was still in the initial stages of growth and development. After the transfer of its ownership, IDBI became the main institution, through which the institutes engaged in financing, promoting and developing industry were to be coordinated. In January 1992, IDBI accessed domestic retail debt market for the first time, with innovative Deep Discount Bonds, and registered path-breaking success. The following year, it set up the IDBI Capital Market Services Ltd., as its wholly-owned subsidiary, to offer a broad range of financial services, including Bond Trading, Equity Broking, Client Asset Management and Depository Services .In September 1994, in response to RBI's policy of opening up domestic banking sector to private participation, IDBI set up IDBI Bank Ltd., in association with SIDBI. In July 1995, public issue of the bank was taken out, after which the Government's shareholding came down (though it still retains majority of the shareholding in the bank). In September 2003, IDBI took over Tata Home Finance Ltd, renamed IDBI Home finance Limited, thus diversifying its business domain and entering the a rena of retail finance sector the year 2005 witnessed the merger of IDBI Bank with the Industrial Development Bank of India Ltd. The new entity continued to its development finance role, while providing an array of wholesale and retail banking products (and does so till date). The following year, IDBI Bank acquired United

Western Bank (which, at that time, had 230 branches spread over 47 districts, in 9 states). In the financial year of 2008, IDBI Bank had a net income of Rs 9415.9 crores and total assets of Rs120, 601 crores. The Present Today, IDBI Bank is counted amongst the leading public sector banks of India, apart from claiming the distinction of being the 4th largest bank, in overall ratings. It Is presently regarded as the tenth largest development bank in the world, mainly in terms of reach. This is because of its wide network of 509 branches, 900 ATMs and319 centers. Apart from being involved in banking services, IDBI has set up institutions like The National Stock Exchange of India (NSE), The National Securities Depository Services Ltd. (NSDL) and the Stock Holding Corporation of India (SHCIL).

Objectives
The main objectives of IDBI are to serve as the apex institution for term finance for industry in India. Its objectives include (1) Co-ordination, regulation and supervision of the working of other financial institutions such as IFCI , ICICI, UTI, LIC, Commercial Banks and SFCs. (2) Supplementing the resources of other financial institutions and thereby widening the scope of their assistance. (3) Planning, promotion and development of key industries and diversifications of industrial growth. (4) Devising and enforcing a system of industrial growth that conforms to national priorities. Functions The IDBI has been established to perform the following functions:(1) To grant loans and advances to IFCI, SFCs or any other financial institution by way of refinancing of loans granted by such institutions which are repayable within 25 year. (2) To grant loans and advances to scheduled banks or state co-operative banks by way of refinancing of loans granted by such institutions which are repayable in 15 years.

(3) To grant loans and advances to IFCI, SFCs, other institutions, scheduled banks, state cooperative banks by way of refinancing of loans granted by such institution to industrial concerns for exports. (4) To discount or rediscount bills of industrial concerns. (5) To underwrite or to subscribe to shares or debentures of industrial concerns. (6) To subscribe to or purchase stock, shares, bonds and debentures of other financial institutions. (7) To grant line of credit or loans and advances to other financial institutions such as IFCI, SFCs, etc. (8) To grant loans to any industrial concern. (9) To guarantee deferred payment due from any industrial concern. (10) To guarantee loans raised by industrial concerns in the market or from institutions. (11) To provide consultancy and merchant banking services in or outside India. (12) To provide technical, legal, marketing and administrative assistance to any industrial concern or person for promotion, management or expansion of any industry. (13) Planning, promoting and developing industries to fill up gaps in the industrial structure in India. (14) To act as trustee for the holders of debentures or other securities.

Subsidiaries The following are the subsidiaries of IDBI

(1) Small Industries Development Bank of India (SIDBI) (2) IDBI Bank Ltd.. (3) IDBI Capital Market Services Ltd. (4) IDBI Investment Management Company

Capital Structure and Operations

As on September 30, 1996, the authorized Capital of IDBI was Rs.2000crores. Issued, subscribed and paid up share capital was Rs.828.76crores.Reserves were Rs.6309 crores. Loan funds were Rs.35450 crores. The total outstanding loans, investments and guarantee of IDBI stood at Rs.39, 221 crore as on 31st March 1996.

INTRODUCTION TO FEDERAL BANK

Federal Bank Limited is a major Indian commercial bank in the private sector, headquartered at Aluva, Kochi, Kerala. As of 18 August 2012, Federal Bank has 1000 branches spread across 24 states in India and 1058 ATMs around the country(across 108 metro centres, 224 urban centres, 384 semi-urban locations and 87 rural areas). Federal Bank opened its 1000th branch at Muthoor, Thiruvalla in Kerala on 17 August 2012,and is planning to hire 2000 professionals by September 2012.The Bank would be the first Bank from Kerala to cross the milestone of 1000 branch network. History

In the year 1931, Travancore Federal Bank was inaugurated at Vengal Varuttisseril at Nedumpuram, near Tiruvalla, Kerala. The 14 founders included Sri Vengal Varuttisseril Oommen Varghese, his brothers Oommen Chacko, Oommen Kurian, Oommen George and also another person from Tiiruvalla, Kavumbhagam Mundapallil Lukose, and others. Oommen Varghese was the Chairman and Oommen Chacko the Manager. After it had functioned for nearly 10 years, the bank's day to day transaction had to be stopped due to the ill-health of the Manager. Understanding this situation, a lawyer from Perumbavoor named Sri K.P.Hormis and his acquaintances joined together, bought the bank and took over the management. In 1945, they moved the bank's registered office to Aluva and Hormis became the Managing Director. In 1947,the bank's name was shortened from Travancore Federal Bank to Federal Bank. In 1970, the bank became a Scheduled Commercial Bank. Recently, it opened a representative office in Dubai.

Acquisitions and Mergers

In 1964, the bank embarked on a series of acquisitions that would substantially increase its size. It acquired the Chalakudy Public Bank in Chalakudy, the Cochin Union Bank inThrissur, and the Alleppey Bank in Alappuzha. In 1965, it acquired the St.George Union Bank in Puthenpally. In 1968, it acquired the Marthandom Commercial Bank in Thiruvananthapuram. In 2006, Federal Bank acquired Ganesh Bank of Kurundwad after the Reserve Bank of India suspended the bank. Established in 1920, Ganesh Bank had its headquarters at Kurundwad, Maharashtra. The bank had a network of 32 branches and its operations were concentrated in Sangli and Kolhapur in Maharashatra and Belgaum in Karnataka. Prior to the merger, Federal Bank had 20 branches in Maharashtra. In March 2008, Federal Bank entered into a joint venture with IDBI Bank and Fortis Insurance International to form IDBI Fortis Life Insurance, of which Federal Bank owns 26 percent. The company ended the year with over 300 Cr in premiums as on 31 March 2009. On 24 August 2010, IDBI Fortis, rejuvenated as IDBI Federal Life Insurance with Aegas of Belgium.

INTRODUCTION TO AGEAS
Ageas N.V./S.A. is a Belgium-Dutch multinational insurance company coheadquartered in Brussels, Belgium and Utrecht, Netherlands. Ageas is Belgium's largest insurer and operates in 14 countries worldwide. The company was renamed from Fortis Holding in April 2010 and consists of those insurance activities remaining after the breakup and sale of the financial services group Fortis during the financial crisis of 2007-2010. It is listed on the Euro next Brussels, Euro next Amsterdam, and Luxembourg stock exchanges and forms part of the bluechip BEL20 stock market index. The company's roots reach back to the 1824 foundation of the Belgian life insurer Assurances Gnrales (now AG Insurance).[2] In 1990 AG merged with the Netherlands-based banc assurer AMEV/VSB to form Fortis. AMEV/VSB had itself been formed earlier that year by the combination of savings bank VSB (Verenigde Spaarbank) and insurer AMEV, which took advantage of the recent relaxation of Dutch legislation preventing mergers between banks and insurers. AMEV had originally been founded in Utrecht in 1920 as Algemeene Maatschappij tot Exploitatie van Verzekeringsmaatschappijen (English: General Society for Operation of Insurance).

After its creation in 1990, Fortis expanded its offerings to include private and investment banking and asset management, establishing subsidiaries around the world, and by 2007 it had become the 20th largest business in the world by revenue. That year Fortis agreed to jointly purchase ABN AMRO with Banco Santander and Royal Bank of Scotland Group, but the onset of the crisis exacerbated problems with financing its part of the large acquisition and prompted fears of impending insolvency. Considered "too big to fail", Fortis received an 11.2 billion bailout from the Benelux governments and saw its retail banking operations in Belgium sold to BNP Paribas and its insurance and banking subsidiaries in the Netherlands nationalised. The remaining assets of the company, consisting principally of insurance operations but also including some distressed assets, were rebranded Fortis Holding. In April 2010 its shareholders agreed a formal change of name to Ageas N.V./S.A., with ownership of the Fortis brand passing to BNP Paribas.

Objectives:
1) To know about the reason for investment in life insurance. 2) To develop and standardize a measure to evaluate investment pattern in life insurance services 3) To evaluate the factors underlying consumer perception towards investment in life insurance policies 4) To compare the differences in consumer perception of male and female consumers 5) To open new vistas for further researches.

History

2006: IDBI Bank, Federal Bank and Belgian-Dutch insurance major Fortis Insurance International NV signed a MoU to start a life insurance company

2008: IDBI Fortis Life Insurance Co. Ltd., which started its operations in March 2008

2008: IDBI Fortis opens its second branch in Andhra Pradesh in Vijayawada 2008: IDBI Fortis Life positive on assured return products

2008: IDBI Fortis launches the Bondsurance Plan 2009: IDBI Fortis announces Rs 250cr capital infusion 2009: Nimbus ropes in IDBI Fortis as title sponsor of IndiaSri Lanka series 2009: 'IDBI Fortis' Boss-Ka-Boss receives PRCI Award 2009: IDBI Fortis launches Retiresurance Pension Plan 2009: IDBI Fortis scores with Goalsurance 2009: IDBI Fortis reaches the banks of Hoogly 2009: IDBI Fortis launches Incomesurance Immediate Annuity 2009: IDBI Fortis Life Insurance uses an interactive application to help users easily calculate their taxes

2009: IDBI Fortis reaches the City of Eastern Light 2009: IDBI Fortis receives bronze Dragon at 'PMAA 2009' 2009: IDBI Fortis Life Insurance introduces financial inclusion plan in rural Orissa 2009: IDBI Fortis launches Termsurance Protection Plan 2009: IDBI Fortis redefines endowment & money back with Incomesurance 2009: IDBI Fortis to open 65 more branches; raise headcount by 1,000 2010: IDBI Fortis now renamed as IDBI Federal Life Insurance Company

Management:
GV Nageswara Rao is the MD & CEO of IDBI Federal Life Insurance. Aneesh Srivastava is the CIO of IDBI Federal Life Insurance. Michael J Wood is the appointed actuary of IDBI Federal Life Insurance.

2.2 PRESENT COMPANY PROFILE

Idbi federal life insurance co ltd is a joint-venture of idbi bank, Indias premier development and commercial bank, federal bank, one of Indias leading private sector banks and ageas, a multinational insurance giant based out of Europe. In this venture, idbi bank owns 48% equity while federal bank and ageas own 26% equity each. . Having started in March 2008, in just five months of inception, idbi federal became one of the fastest growing new insurance companies to garner rs 100 cr in premiums. Through a continuous process of innovation in product and service delivery idbi federal aims to deliver world-class wealth management, protection and retirement solutions that provide value and convenience to the Indian customer. The company offers its services through a vast nationwide network of 2137 partner bank branches of idbi bank and federal bank in addition to a sizeable network of advisors and partners. As on 28th February 2013, the company has issued over 8.65 lakh policies with a sum assured of over rs. 26,591 cr. Idbi federal today is recognized as a customer-centric brand, with an array of awards to their credit. They have been awarded the pmaa awards (2009) for best dealer/sales force activity, Effie award (2011) for effective advertising, and conferred with the status of master brand 2012-13 by the cmo council USA and cmo Asia.

2.3 About the sponsors of IDBI Federal Life Insurance Co Ltd

+
48% +

+
26% +

=
26% = 100%

IDBI Bank Ltd. continues to be, since its inception, Indias premier industrial development bank. It came into being as on July 01, 1964 (under the Companies Act, 1956) to support Indias industrial backbone. Today, it is amongst Indias foremost commercial banks, with a wide range of innovative products and services, serving retail and corporate customers in all corners of the country from 1077 branches and 1702 ATMs. The Bank offers its customers an extensive range of diversified services including project financing, term lending, working capital facilities, lease finance, venture capital, loan syndication, corporate advisory services and legal and technical advisory services to its corporate clients as well as mortgages and personal loans to its retail clients. As part of its development activities, IDBI Bank has been instrumental in sponsoring the development of key institutions involved in Indias

financial sector National Stock Exchange of India Limited (NSE) and National Securities Depository Ltd, SHCIL (Stock Holding Corporation of India Ltd), CARE (Credit Analysis and Research Ltd). Federal Bank is one of Indias leading private sector banks, with a dominant presence in the state of Kerala. It has a strong network of over 1060 branches and 1158 ATMs spread across India. The bank provides over four million retail customers with a wide variety of financial products. Federal Bank is one of the first large Indian banks to have an entirely automated and interconnected branch network. In addition to interconnected branches and ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele Banking, Any Where Banking, debit cards, online bill payment and call centre facilities to offer round the clock banking convenience to its customers. The Bank has been a pioneer in providing innovative technological solutions to its customers and the Bank has won several awards and recommendations.

Ageas is an international insurance group with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. These are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia and served through a combination of wholly owned subsidiaries and partnerships with strong financial institutions and key distributors around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France, Hong Kong and UK. Ageas is the market leader in Belgium for individual life and employee benefits, as well as a leading non-life player through AG Insurance. In the UK, Ageas has a strong presence as the fourth largest player in private car insurance and the over 50s market. Ageas employs more than 13,000 people and has annual inflows of more than EUR 21 billion.

2.4 PRODUCT PORTFOLIO

Being a new entrant, IDBI is slowly increasing its portfolio which includes:

Retirement Plan: With rising inflation, its absolutely necessary to make

provisions for the future which makes retirement plan an important financial decision. Better known as Pension plan, this plan takes care of financial needs after retirement by investing a part of your savings for limited period. Pension plan provides steady income after retirement and takes care of daily needs. The pension plan offered by IDBI Federal is Retiresurance.

Term Plan: A risk plan which provides comprehensive cover for your family in the
unfortunate event of untimely demise. A term life insurance plan provides good cover at relatively nominal cost and has no survival benefits. IDBI Federal Life term plan is Termsurance.

Investment Plan: Popularly known as ULIP, an investment plan invests part of

your savings in equity or debt market as per your preference. The objective of investment plan is to give you returns which easily beat the rising costs since the usual returns in a bank are extremely low. ULIPs offered by IDBI Federal Life are Wealthsurance, Bondsurance and Incomesurance.

Health Plan: Slightly different from health insurance, health plan provides cover
for surgery costs, critical illness. A lump sum is paid irrespective of actual hospital bill. Healthsurance is IDBI Federal Lifes health plan. IDBI Federal Life Insurance Product Table: Retirement/Pension Plan Term Plan Savings & Investment Plan Savings & Investment Plan Savings & Investment Plan Health Plan Retiresurance Termsurance Wealthsurance Bondsurance Incomesurance Healthsurance

Financial Information:
The total premium earned for the half year ended September 30, 2010 was Rs.3427 million. The profit after tax for the same period is Rs.513 million. There have been 132 death claims reported during the period out of which 43 claims were settled and 19 claims were rejected.

VISION AND VALUES

Maintaining integrity through our values

IDBI FEDERAL LIFE INSURANCE Co. Ltd. s Vision

To be the leading provider of wealth management, protection and retirement solutions that meets the needs of our customers and adds value to their lives.

IDBI FEDERAL LIFE INSURANCE Co. Ltd. s Mission To continually strive to enhance customer experience through innovative product offerings, dedicated relationship management and superior service delivery while striving to interact with our customers in the most convenient and cost effective manner. To be transparent in the way we deal with our customers and to act with integrity.

To invest in and build quality human capital in order to achieve our mission.

IDBI FEDERAL LIFE INSURANCE Co. Ltd. s Values

Transparency: Crystal Clear communication to our partners and stakeholders Value to Customers: A product and service offering in which customers perceive value Rock Solid and Delivery on Promise: This translates into being financially strong, operationally robust and having clarity in claims Customer-friendly: Advice and support in working with customers and partners Profit to Stakeholders: Balance the interests of customers, partners, employees, shareholders and the community at large

Marketing Campaigns:

IDBI Federal Life recently launched television commercials focusing on its frontline productsWealthsurance and Incomesurance. The campaign taglines are Jisne bhi suna khareed liya and Guaranteed Income Ki Bhavishavani Whereas the first advertisement reflects that the product is so great that whoever hears about it, buys it instantly, the second advertisement promises to be clear and transparent on the issue of returns in the investment product. IDBI Federal has also introduced two animation characters by the name of Happy and Lucky to promote the brand. 2.5 COMPETITION ANALYSIS
IDBI FEDERAL LIFE INSURANCE Co. Ltd. is in a highly competitive segment i.e., insurance sector they are having large number of rival companies fighting along with them in taking control of the industry. Threat of intense segment rivalry- The major plus point for IDBI FEDERAL LIFE INSURANCE Co. Ltd. is the brand value of its partners. The competition in this market is a very difficult or tough you could say we can refer this intense competition as Cut throat competition or Red ocean competition market. The market condition is oligopoly where a few number of big competitors are providing identical product and services differing only in quality of them. Each competitor has their own trademark attribute, they are finding that attribute and charging for that particular attribute. As we know LICs attribute is their hold in rural market. But when we say about population growth, economic growth, or government policies insurance segment is very attractive because only 25% insurable person are insured secondly 80% population are under age of 45. The competitors of IDBI FEDERAL LIFE INSURANCE Co. Ltd. are o Life Insurance corporation of India o Bajaj Allianz life insurance company o HDFC standard life insurance Co. Ltd. o Birla Sun Life o ICICI Prudential life insurance Co. Ltd. o ING vysya life insurance Co. Ltd. o Max New York life insurance Co. Ltd.

o Met life India insurance Co. o Kotak Mahindra old mutual life insurance Ltd. o SBI Life insurance Co. Ltd. o TATA AIG Life insurance company Limited o Reliance life insurance company limited o Aviva life insurance Co. Pvt. Ltd o Sahara India life insurance Co. Ltd o Sriram Life insurance Co. Ltd o Bharati AXA life Insurance Co. Ltd. o Future general life insurance company Ltd. o IDBI Fortis life insurance company Ltd. o Canara HSBC Oriental Bank of Commerce life insurance Co. Ltd. o AEGON Religare Life insurance Co. Ltd. o Dlf Pramaerica Life insurance Co. Ltd. o Star Union Dai-ichi life insurance Co. Ltd. o Andhra BOB Legal General life insurance Co. Ltd. LIC has many resources and it has above 50-year experience in insurance field but has only 3 year experience in market. However, due to AGEASs experience, FEDERAL BANKS and IDBIs brand value, IDBI FEDERAL LIFE INSURANCE Co. Ltd. had made a good position in the market with this comparatively short period of time. Likewise many companies alike IDBI FEDERAL LIFE INSURANCE Co. Ltd. are facing threat from LIC if India to this reason price war, advertisement, and new product innovation will be expensive in future.

Threat of new entrance- Due to aggressive competition and high entry exit barrier, this is not attractive segment for new player. For entering in insurance field, mandatory capital is 100 crores. Secondly, foreign stake limited with 26%, third Indian company have no experience in insurance business. Exit barrier are also very high because, no company can leave market after entering due to loss because firstly, 100 crores will be lost secondly, their compensation (customer or other company) will be very high or more than deposited money. So in long run, company will try to less their business but they will not leave market. So this is good factor for IDBI FEDERAL LIFE INSURANCE Co. Ltd. Because, where entry or exit barrier are high, profit potential are also high.

Threat of substitute product- This is not attractive market in view of substitute goods because there is many substitute in market but only service style is different. Different insurance company provide at least same product but presentation is different. In case of lower substitute (means investment purpose)

many product in India for example, share, mutual fund, fixed deposit. Substitute place a limit on price and on profit.

Threat of buyers growing power- In India buyers growing power are increasing because they have more concentrated or organized towards market. Government has established insurance regulator (IRDA) in India for growing buyers barging power. Due to lowest switching, buyers are very price sensitive and buyers have many sources for knowing about different company product. Due to education buyer can analysis that, which product is good for him. So due to growing buyers power this segment is not good for new player.

Threat of suppliers growing power- Due to oligopoly market condition insurance company cannot raise price but they can increase their profit from selling more policies in market. In India, supply-growing power (agent, broker, bank assurance) are growing due to lot of company availability in India and this is not good for IDBI FEDERAL LIFE INSURANCE Co. Ltd.

CHAPTER 5 OBJECTIVE OF STUDY

OBJECTIVE OF STUDY

The objective of this study is to understand better about the insurance sector, which is the fast growing business in India. Proper understanding & analysis of life insurance industry. To conduct market surveys on a sample selected from the entire population and study the consumers behaviour. As large insurance market is still untapped so based on the survey the potential of the Indian market can be evaluated. New distribution channel and marketing strategies can be evaluated based on the awareness among the masses regarding IDBI FEDERAL LIFE INSURANCE Co. Ltd.

CHAPTER 8 LIMITATIONS OF STUDY

8 LIMITATIONS OF STUDY
Some of the difficulties and limitations faced during my training are as follows:

Lack of awareness among the people

This is the biggest limitation found in this sector. Most of the people are not aware about the importance and the necessity of the insurance in their life.

Perception of the people towards Insurance sector

People still consider insurance just as a Tax saving device. So today also there is always a rush to buy an Insurance Policy only at the end of the financial year.

Insurance does not give good returns

Still today people think that Insurance does not give good returns. They are not aware of the modern Unit Linked Insurance Plans which are offered by most of the Private sector players. They are still under the perception that if they take Insurance they will get only 5-6% returns. Nowadays most of the modern Unit Linked Insurance Plans gives returns which are many times more than that of bank Fixed deposits, National saving certificate, and PPF.

Lack of awareness about the earning opportunity in the Insurance sector

People still today are not aware about the earning opportunity that the Insurance sector gives. Companies in order to beat the competition and to increase their Insurance Advisors and increase their reach to the customers are giving very high commission but people are not aware of that.

Increased competition
Today the competition in the Insurance sector has become very stiff. Currently there are more than 20 Life Insurance companies working in India. Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market. This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has become very difficult.

QUESTIONNARE
Dear Sir/Madam, I am MADHUKAR RAI doing this survey as a part of my Summer Internship Project. I will be extremely grateful if you could spare a valuable minute of yours. All the information given will be used only for academic purpose and it will be confidential:-

1. NAME _____________________________________________________ ______________ 2. Date Of Birth - ________________ Female Sex :- Male

3. Which is the best investment option? a. Shares and debentures. b. Bank Deposits. c. Mutual Funds. d. Financial Products. e. Post Office Savings. f. Others. 4. Do you own an insurance policy? a. Yes b. No If yes, please mention which company policy you own ________________________________________________ _____________________

5. Following are the features you consider before taking an insurance policy? Insurance Coverage High Returns Low premium amount Flexible Withdrawals Risk Involved a. Strongly Agree b. Agree c. Neither Agree nor Disagree d. Disagree e. Strongly Disagree

6. Are you aware of IDBI Federal Life Insurance Co Ltd products? a. Yes b. No
7. Do you have a life insurance? A) Yes B) No

8. If yes which insurance company? ______________________________ and which plan? A) Term plan back G)Retirement B) Endowment H) Others C) Whole life D)Money E) Unit linked F)Child plan

9. What would be your preferable mode of premium payment? a. Annual mode of premium payment. b. Half Yearly mode of premium payment.
10. What is your motive behind investing in insurance? (Rank from 1 to 4) A) Tax benefit B) Savings C) Risk cover Returns

D)

11. Does the company in which you work provide you insurance? a. Yes b. No 12. Are you satisfied with the different plans of IDBI Federal Life Insurance? Yes No

13. How will you rate the overall plans of IDBI Federal Life Insurance? Excellent Good Very Good Bad

14.Do you think that IDBI Federal Life Insurance is preferred because of its returns? Yes No

15.Your Valuable Feedback__________________________________________________ _________________________________________________________ _________________________________________________________ ______________________________________________________

DATE: SIGNATURE