Risk Management Via Insurance and Its Future in Suburban Area Rajiv Roy 08BS0002557

Risk Management Via Insurance And Its scope in Suburban Area
A
REPORT ON
RISK MANAGEMENT VIA INSURANCE
AND ITS SCOPE IN SUBURBAN AREA
BY
RAJIV ROY
08BS0002557
(OPULENCE BUSINESS SOLUTION PVT.LTD)

SUBMITTED ON 18TH MAY, 2009
1
A
REPORT ON
RISK MANAGEMENT VIA INSURANCE
AND ITS SCOPE IN SUBURBAN AREA
BY
RAJIV ROY
(08BS0002557)
(A Report submitted as a partial fulfillment of requirement of MBA program of
ICFAI Business School).
Faculty Guide Company Guide

Prof. Pankaj Madhani Mr. Edward Macwan
(IBS Ahmedabad) (Vice President-OBS)
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ACKNOWLEDGEMENT
First of all I would like to thanks the entire management team of Opulence Business Solution
Pvt. Ltd for giving me opportunity to gain knowledge in practical world. Due to the fact that
knowledge and material required could never be sufficient, it was imperative that the people who
guided me were very resourceful and knowledgeable. A deep sense of gratitude for the above
reason is owned to Mr. Bhavesh Patel(Chairman of the co.), Mr. Edward Macwan(Vice
president),Mrs. Archana Patel(director) and other members and employees of Opulence.
I would like to express my sincere thanks to Prof. Pankaj Madhani, my faculty guide for his
continuous guidance and motivations, finding innovative ways to add my report and helping in
whatever capacity he could in various stage of my project.
I also take this opportunity to thank Prof. Bala Bhaskaran (Dean, ICFAI BUSINESS SCHOOL,
AHMEDABAD) and all other respected faculties for helping me undertake and complete this
project.
Finally a note of thanks to all my mates, colleagues and others who have helped in no small
measure by co-operating during the project and providing constructive advice.
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Contents
ACKNOWLEDGEMENT ................................................................................................................................... 3
ABSTRACT...................................................................................................................................................... 5
OBJECTIVE ..................................................................................................................................................... 6
SCOPE ............................................................................................................................................................ 7
COMPANY PROFILE ....................................................................................................................................... 8
PREFACE ...................................................................................................................................................... 11
EXECUTIVE SUMMARY ................................................................................................................................ 12
RISK MANAGEMENT.................................................................................................................................... 13
RISK MANAGEMENT PROCESS .................................................................................................................... 14
Identification ....................................................................................................................................... 14
Assessment.......................................................................................................................................... 15
Potential risk treatments ...................................................................................................................... 16
THE HISTORY OF INDIAN INSURANCE INDUSTRY........................................................................................ 19
IRDA (INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY): ........................................................ 21
FUNCTIONS OF INSURANCE ........................................................................................................................ 24
MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA .......................................................................... 26
HOW TO MANAGE RISK BY INSURANCE ..................................................................................................... 29
METHODOLOGY .......................................................................................................................................... 31
RESEARCH METHODOLOGY ........................................................................................................................ 32
METHODOLOGY ..................................................................................................................................... 33
ANALYSIS ..................................................................................................................................................... 35
ANALYSIS AND INTERPRETATION................................................................................................................ 36
PROJECT ON LEAVE ENCASHMENT POLICY ................................................................................................. 46
FINDINGS OF THE STUDY ............................................................................................................................ 53

LEARNINGS FROM SIP ................................................................................................................................. 54
RECOMMENDATIONS ................................................................................................................................. 55
LIMITATIONS OF STUDY .............................................................................................................................. 56
ANNEXTURE ................................................................................................................................................ 57
Questionnaire ............................................................................................................................................. 58
BIBLIOGRAPHY ............................................................................................................................................ 63
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ABSTRACT
The work which was assigned to me was mainly to diagnosis the financial requirement of HNIs
client by using various software. And also to understand the risk appetite capacity taking various
measures like age, family background, and nature of work the client doing. There were certain
problem in these processes because of recessionary period people were already lose in their
investment so very few people were thinking of further investment. By this observation I could
understand the risk behavior of an individual in respect to economical conditions.
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OBJECTIVE
Objective of the project are
To understand the risk appetite nature of different individual.

To analyze the portfolio of an individual and try to reduce the risk involvement.
To understand how insurance can be used as risk reducing instrument as well as
investment option.
To understand what problem actually faces by Insurance company during recession and
what can be the possible solution for company to gain in recession.
To learn about the scope of Insurance in suburban India.
To know why people should invest in Insurance.
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SCOPE
The project has given me a practical exposure of the working culture of an

organization.
It provided me an opportunity to interact with many people.
It also helped me in getting the knowledge about different insurance
products of a company.
It also provided me deep knowledge about Insurance in India and its
current scenario.
This project helped me a lot in improving my interpersonal skill like
communication, presentation skills.
The project has help to understand the scope of Insurance business in
suburban area in India.
This project helped me to understand the difference between Insurance
and other financial instruments.
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COMPANY PROFILE
Opulence and its business partner are pleased to present their credentials as a full service
Merchant Bank, Investment Bank, Brokerage House & Financial Services Company with
presence in Mumbai as well. Its Partner (RBI registered) and its subsidiary (SEBI registered) are
together a full service Investment Bank, Merchant Bank and “Institutional” Stock Broking
company with membership in NSE & BSE and Depository services, providing a wide range of
Financial Services to over 500 large and mid-cap companies and thousands of retail clients all
over India since 1994. Our Board consists of eminent legal and finance professionals who have
gained their experience by working with leading Banks and Financial Advisory Institutions of
India and abroad expertise in Financial Services, Capital Market, and Investment Banking.
Its valued CLIENTELE includes leading companies from the prestigious groups like TATA,
Mahindra, Godrej, and over 500 large and medium companies.
The Range Of SERVICES Provided By Opulence Includes:

Corporate Finance
 Secured/Unsecured Term Loans
 Working Capital Finance
 ECB/FCNR(B) Facilities
 Placement of Debentures & Bonds
 Project Funding – Equity & Loans
 Financial structuring
 Trade Finance
Project Finance
 Financial Structuring
 Project Report and Financial Feasibility Study
 Raising Project Equity
 Raising Project loans
Investment Banking
 Corporate Advisory Services
 Mergers and Acquisitions
 Private Equity Placement
 Joint Venture Partner Search
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Trade Finance
 LC bills discounting
 Clean Bills discounting
 Inter Corporate Deposits
 Unsecured working capital loan
 Import and Export Finance (Supplier’s / Buyer’s Credit)
Merchant Banking
 Initial Public Offers and Follow on shares
 Right Issues
 Buybacks
 Open Offers
 Preferential allotments
 ESOP certification
 BSE listing of companies listed on Regional Stock Exchanges
 Delisting of Securities
Due Diligence
 Finance & Accounting
 Direct Taxes
 Indirect Taxes
 Legal Service
Valuation
 Business/Division Valuation
 Brand Valuation
 Valuation of Equity Shares
 Employee Share based compensation Valuation
 Impairment of Assets (Technical Valuation)
 Valuation of Financial Instruments
 Purchase Price Allocation
 Fairness Opinion
 Other Intangibles – License / Copyrights / trademarks / technology
Opulence Private Wealth Management

(A) Need based financial planning
• Personal Tax planning
• Will creation
• Estate planning / legacy planning
• HUF & Family trust management
(B) Domestic and overseas financial services
• Mutual fund portfolio management
• Life Insurance portfolio management
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• General Insurance portfolio management
• Stock portfolio management
• Private equity management
• Structure notes
• Retail Loans ( HL / PL / VL )
• Government & Corporate Bonds
Realty Solutions
 Build one
• Gathering important basic resources like Land / Finance / Investors / Developers etc. and
offering various options of attractive returns on investment to the investors in various
formats.
 Select one
• Here we play an important role of match making from either and of buyers and sellers.
We also work on various rental and lease options.
Distress Asset Management & Asset Reconstruction Solutions

Authorized & a licensed entity working as a business partner with a central government
initiative called bank DRT ( Debt Recovery Tribunal ) for resolution of non-performing
financial assets (NPAs). We are also working as business partner with Reliance ADAG
Investment banking & Property Ventures Groups and have other nationalize banks,
private banks & MNC banks.
Forex Solutions
• Forex Solutions for Import – Export houses
• Forex portfolio management services for promoters
• Forex knowledge academic for promoters, finance & treasury key officials.
BPO Solutions
• Book keeping and accounting
• Taxation
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PREFACE
The liberalization of the Indian insurance sector has been the subject of much heated debate for
some years. The policy makers where in the catch 22 situation wherein for one they wanted
competition, development and growth of this insurance sector which is extremely essential for
channeling the investments in to the infrastructure sector. At the other end the policy makers had
the fears that the insurance premium, which are substantial, would seep out of the country; and
wanted to have a cautious approach of opening for foreign participation in the sector.
As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw
the day of the light thanks to the maturing polity emerging consensus among factions of different
political parties. Though some changes and some restrictive clauses as regards to the foreign
participation were included the IRDA has opened the doors for the private entry into insurance.
Whether the insurer is old or new, private or public, expanding the market will present multitude
of challenges and opportunities. But the key issues, possible trends, opportunities and challenges
that insurance sector will have still remains under the realms of the possibilities and speculation.
The large scale of operations, public sector bureaucracies and cumbersome procedures hampers
nationalized insurers. Therefore, potential private entrants expect to score in the areas of
customer service, speed and flexibility. They point out that their entry will mean better products
and choice for the consumer. The critics counter that the benefit will be slim, because new
players will concentrate on affluent, urban customers as foreign banks did until recently. This
seems to be a logical strategy. Start-up costs-such as those of setting up a conventional
distribution network-are large and high-end niches offer better returns. However, the middle-
market segment too has great potential. Since insurance is a volumes game. Therefore, private
insurers would be best served by a middle-market approach, targeting customer segments that are
currently untapped.
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EXECUTIVE SUMMARY
In today’s corporate and competitive world, I find that insurance sector has the maximum growth
and potential as compared to other sectors. Insurance has the maximum growth rate of 70-80%
while as FMCG sector has maximum 12-15% of growth rate. Even in the last quarter while
global financial turmoil make the situation worst for investment sector, Insurance in India has
grown by 6%. So this is a sector which will sustain in any situation, recession or whatever.This
growth potential attracts me to enter in this sector and Opulence Business Solutions Pvt. Ltd.
has given me the opportunity to work and get experience in highly competitive and enhancing
sector.
 The success story of good market share of different market organizations depends upon
the availability of the product and services near to the customer, which can be distributed
through a distribution channel. In Insurance sector, distribution channel includes only
agents or agency holders of the company. If a company like ICICI PRUDENTIAL,
RELIANCE LIFE INSURANCE, TATA AIG, BAJAJ ALLIANCE GENERAL
INSURANCE, LIC, etc. has adequate agents in the market they can capture big market as
compared to the other companies.
Agents are the only way for a company of Insurance sector through which policies and benefits
of the company can be explained to the consumer.
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RISK MANAGEMENT
Risk Management is the identification, assessment, and prioritization of risks followed by

coordinated and economical application of resources to minimize, monitor, and control the
probability and/or impact of unfortunate events. Risks can come from uncertainty in financial
markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as
well as deliberate attacks from an adversary. Several risk management standards have been
developed including the Project Management Institute, the National Institute of Science &
Technology, actuarial societies, and ISO standards. Methods, definitions and goals vary widely
according to whether the risk management method is in the context of project management,
security, engineering, industrial processes, financial portfolios, actuarial assessments, or public
health and safety.
For the most part, these methodologies consist of the following elements, performed, more or
less, in the following order.
1. Identify, characterize, and assess threats

2. Assess the vulnerability of critical assets to specific threats
3. Determine the risk (i.e. the expected consequences of specific types of attacks on specific
assets)
4. Identify ways to reduce those risks
5. Prioritize risk reduction measures based on a strategy
The strategies to manage risk include transferring the risk to another party, avoiding the risk,
reducing the negative effect of the risk, and accepting some or all of the consequences of a
particular risk.
In ideal risk management, a prioritization process is followed whereby the risks with the greatest
loss and the greatest probability of occurring are handled first, and risks with lower probability of
occurrence and lower loss are handled in descending order. In practice the process can be very
difficult, and balancing between risks with a high probability of occurrence but lower loss versus
a risk with high loss but lower probability of occurrence can often be mishandled.
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RISK MANAGEMENT PROCESS
RISK
ELEMINATION
RISK RISK
RETENTION TRANSFER
RISK
ASSESSMENT
RISK
IDENTIFICATION
Identification
The first step in the process of managing risk is to identify potential risks. Risks are about events
that, when triggered, cause problems. Hence, risk identification can start with the source of
problems, or with the problem itself.
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 Source analysis[ Risk sources may be internal or external to the system that is the target of
risk management.
Examples of risk sources are: stakeholders of a project, employees of a company or the weather
over an airport.
 Problem analysis Risks are related to identified threats. For example: the threat of losing
money, the threat of abuse of privacy information or the threat of accidents and casualties.
The threats may exist with various entities, most important with shareholders, customers and
legislative bodies such as the government.
The chosen method of identifying risks may depend on culture, industry practice and
compliance. The identification methods are formed by templates or the development of templates
for identifying source, problem or event. Common risk identification methods are:
 Objectives-based risk identification Organizations and project teams have objectives. Any
event that may endanger achieving an objective partly or completely is identified as risk.
 Scenario-based risk identification In scenario analysis different scenarios are created. The
scenarios may be the alternative ways to achieve an objective, or an analysis of the
interaction of forces in, for example, a market or battle. Any event that triggers an undesired
scenario alternative is identified as risk.
 Common-risk checking In several industries lists with known risks are available. Each risk in
the list can be checked for application to a particular situation.
 Risk charting This method combines the above approaches by listing Resources at risk,
Threats to those resources Modifying Factors which may increase or decrease the risk and
Consequences it is wished to avoid.
Assessment
Once risks have been identified, they must then be assessed as to their potential severity of loss
and to the probability of occurrence. These quantities can be either simple to measure, in the case
of the value of a lost building, or impossible to know for sure in the case of the probability of an
unlikely event occurring. Therefore, in the assessment process it is critical to make the best
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educated guesses possible in order to properly prioritize the implementation of the risk
management plan.
The fundamental difficulty in risk assessment is determining the rate of occurrence since
statistical information is not available on all kinds of past incidents. Furthermore, evaluating the
severity of the consequences (impact) is often quite difficult for immaterial assets. Asset
valuation is another question that needs to be addressed. Thus, best educated opinions and
available statistics are the primary sources of information. Nevertheless, risk assessment should
produce such information for the management of the organization that the primary risks are easy
to understand and that the risk management decisions may be prioritized. Thus, there have been
several theories and attempts to quantify risks. Numerous different risk formulae exist, but
perhaps the most widely accepted formula for risk quantification is:
Rate of occurrence multiplied by the impact of the event equals risk
Potential risk treatments

Once risks have been identified and assessed, all techniques to manage the risk fall into one or
more of these four major categories:
 Avoidance (eliminate)
 Reduction (mitigate)
 Transfer (outsource or insure)
 Retention (accept and budget)
Risk avoidance
Includes not performing an activity that could carry risk. An example would be not buying
a property or business in order to not take on the liability that comes with it. Another would be
not flying in order to not take the risk that the airplane were to be hijacked. Avoidance may seem
the answer to all risks, but avoiding risks also means losing out on the potential gain that
accepting (retaining) the risk may have allowed. Not entering a business to avoid the risk of loss
also avoids the possibility of earning profits.
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Risk reduction
Involves methods that reduce the severity of the loss or the likelihood of the loss from occurring.
For example, sprinklers are designed to put out a fire to reduce the risk of loss by fire. This
method may cause a greater loss by water damage and therefore may not be suitable. Fire
suppression systems may mitigate that risk, but the cost may be prohibitive as a strategy.
Modern software development methodologies reduce risk by developing and delivering software
incrementally. Early methodologies suffered from the fact that they only delivered software in
the final phase of development; any problems encountered in earlier phases meant costly rework
and often jeopardized the whole project. By developing in iterations, software projects can limit
effort wasted to a single iteration.
Outsourcing could be an example of risk reduction if the outsourcer can demonstrate higher
capability at managing or reducing risks. In this case companies outsource only some of their
departmental needs. For example, a company may outsource only its software development, the
manufacturing of hard goods, or customer support needs to another company, while handling the
business management itself. This way, the company can concentrate more on business
development without having to worry as much about the manufacturing process, managing the
development team, or finding a physical location for a call center.
Risk retention
Involves accepting the loss when it occurs. True self insurance falls in this category. Risk
retention is a viable strategy for small risks where the cost of insuring against the risk would be
greater over time than the total losses sustained. All risks that are not avoided or transferred are
retained by default. This includes risks that are so large or catastrophic that they either cannot be
insured against or the premiums would be infeasible. War is an example since most property and
risks are not insured against war, so the loss attributed by war is retained by the insured. Also
any amounts of potential loss (risk) over the amount insured is retained risk. This may also be
acceptable if the chance of a very large loss is small or if the cost to insure for greater coverage
amounts is so great it would hinder the goals of the organization too much.
Risk transfer
In the terminology of practitioners and scholars alike, the purchase of an insurance contract is
often described as a "transfer of risk." However, technically speaking, the buyer of the contract
generally retains legal responsibility for the losses "transferred", meaning that insurance may be
described more accurately as a post-event compensatory mechanism. For example, a personal
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injuries insurance policy does not transfer the risk of a car accident to the insurance company.
The risk still lies with the policy holder namely the person who has been in the accident. The
insurance policy simply provides that if an accident (the event) occurs involving the policy
holder then some compensation may be payable to the policy holder that is commensurate to the
suffering/damage.
Some ways of managing risk fall into multiple categories. Risk retention pools are technically
retaining the risk for the group, but spreading it over the whole group involves transfer among
individual members of the group. This is different from traditional insurance, in that no premium
is exchanged between members of the group up front, but instead losses are assessed to all
members of the group.
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THE HISTORY OF INDIAN INSURANCE INDUSTRY
Life Insurance in its modern form came to India from England in the year 1818. Oriental Life
Insurance Company started by Europeans in Calcutta was the first Life Insurance Company on
Indian soil. All the insurance companies established during that period were brought with the
purpose of looking after the needs of European community and Indian natives were not being
insured by these companies. However, later with the efforts of eminent people like Babu
Muttylal Seal, the foreign Life Insurance Companies started insuring Indian lives. But Indian
lives were being treated as sub-standard lives and heavy extra premiums were being charged on
them. Bombay Mutual Life Assurance Society heralded the birth of first Indian Life Insurance
Company in the year 1870, and covered Indian lives at normal rates.
Insurance is an Rs. 450 billion industry in India. The value of the market is determined by gross
premium incomes. The Life Insurance segment writes about 80% of the overall market value.
Indian Insurance market was at its all time high in 2003 with a growth of about 17.4% over the
previous year. Since 2001 insurance is growing at the rate of 15-20% annually. The growth in the
Insurance industry is affected by volatility in real estate rates, GDP rates and long term interest
rates. Fluctuations in exchange rates also affect the growth in this sector. The gross premium as a
percentage of the GDP has gone up from 2.3 in the year 2000 to 4.8 in 2006. Together with
banking services, it adds about 7% to the country’s GDP.
Some of the important milestones in the Life Insurance business in India are:
British-India Period:
1818: Oriental Life Insurance Company, the first Life Insurance Company on Indian soil started
functioning.
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1870: Bombay Mutual Life Assurance Society, the first Indian Life Insurance Company started
its business.
1912: The Indian Insurance Companies Act enacted as the first statute to regulate the Life
Insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crores from the Government of India.
Liberalization of Indian Insurance:
1994: Insurance sector invited private participation to induce a spirit of competition amongst the
various insurers and to provide a choice to the consumers.
1997: Insurance regulator IRDA was set up as there felt the need:
To set up an independent regulatory body, that provides greater autonomy to Insurance

companies in order to improve their performance, in the first year of Insurance market
liberalization (2001) as much as 16 private sector companies including joint ventures with
leading foreign Insurance companies have entered the Indian Insurance sector. Of this, 10 were
under the Life Insurance category and six under general insurance. Thus in all there are 25
players (12- life insurance and 13- general insurance) in the Indian Insurance industry till date.
Indian Insurance in 21st Century:
2000: IRDA starts giving licenses to private insurers: ICICI prudential and HDFC Standard Life
Insurance first private insurers to sell a policy.
2002: Banks allowed selling Insurance plans. The TPAs enter the scene, insurers start setting
non-life claims in the cashless mode.
2007: First Online Insurance portal, www.insurancemall.in set up by an Indian Insurance Broker,
Bonsai Insurance Broking Pvt. Ltd.
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IRDA (INSURANCE REGULATORY AND

DEVELOPMENT AUTHORITY):
Mission: To protect the interests of the policyholders, to regulate, promote and ensure orderly
growth of the insurance industry and for matters connected therewith or incidental thereto.
Composition of Authority:
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority
(IRDA, which was constituted by an act of parliament) specify the composition of Authority
The Authority is a ten member team consisting of
a Chairman;
five whole-time members;
four part-time members,
(all appointed by the Government of India)
Duties, powers and Functions of authority:
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA..
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Subject to the provisions of this Act and any other law for the time being in force, the
Authority shall have the duty to regulate, promote and ensure orderly growth of the
insurance business and re-insurance business.
Without prejudice to the generality of the provisions contained in sub-section (1), the
powers and functions of the Authority shall include, -
(a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend
or cancel such registration;
(b) protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance
claim, surrender value of policy and other terms and conditions of contracts of
insurance;
(c) specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
(d) specifying the code of conduct for surveyors and loss assessors;
(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organizations connected with the insurance
and re-insurance business;
(g) levying fees and other charges for carrying out the purposes of this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries
and other organizations connected with the insurance business;
(i) control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee under section 64U of the Insurance Act,
1938 (4 of 1938);
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(j) specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance
intermediaries;
(k) regulating investment of funds by insurance companies;
(l) regulating maintenance of margin of solvency;
(m) adjudication of disputes between insurers and intermediaries or insurance

intermediaries;
(n) supervising the functioning of the Tariff Advisory Committee;
(o) specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organizations referred to in clause (f);
(p) specifying the percentage of life insurance business and general insurance business to
be undertaken by the insurer in the rural or social sector; and
(q) exercising such other powers as may be prescribed
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FUNCTIONS OF INSURANCE
The functions of Insurance can be bifurcated into two parts:

1. Primary Functions.
2. Secondary Functions.
3. Other Functions.
The primary functions of insurance include the following:

Provide protection- The primary function of insurance is to provide against future
risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but
can certainly provide for the losses of risk. Insurance is actually a protection against
economic loss, by sharing the risk with others.
Collective bearing of risk- Insurance is a device to share the financial loss of few
among many others. Insurance is a mean by which few losses are shared among larger
number of people. All the insured contribute the premium towards a fund and out of
which the persons exposed to a particular risk is paid.
Assessment of risk- Insurance determines the probanle volume of risk by evaluating

various factors that give rise to risk. Risk is the basis for determining the premium rate
also.
Provide certainty- Insurance is a device, which helps to change from uncertainty to

certainty. Insurance is device whereby the uncertain risks may be made more certain.
The secondary functions of insurance include the following:
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Prevention of losses- Insurance cautions individual and businessman to adopt

suitable device to prevent unfortunate consequences of risk by observing safety
instructions, installation of automatic sparkle or alarm system etc. prevention of losses
cause lesser payment to the assured by the insurer and this will encourage for more
savings by way of premium. Reduced rate of premiums stimulate for more business and
better protection to the insured.
Small capital to cover larger risks- Insurance relieves the businessmen from
security investments, by paying small amount of premium against larger risks and
uncertainty.
Contributes towards the development of larger industries- Insurance

provides development opportunity to those larger industries having more risks in their
setting up. Even the financial institutions may be prepared to give credit to sick
industrial units which have insured their assets including plant and machinery.
The other functions of insurance include the following:
Means of savings and investment- Insurance serves as saving and investment,

insurance is a compulsory way of savings and it restricts the unnecessary expenses by
the insured’s for the purpose of availing income-tax exemptions also, people invest in
insurance.
Source of earning foreign exchange- Insurance is an international business. The

country can earn foreign exchange by way of issue of marine insurance policies and
various other ways.
Risk free tade- Insurance promotes exports insurance, which makes the foreign trade
risk free with the help of different types of policies under marine insurance cover.
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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN

INDIA
 Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread
the message of life insurance in the country and mobilize people’s savings for nation-
building activities. LIC with its central office in Mumbai and seven zonal offices at
Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100
divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active
agents spread over the country.
The corporation also transacts business abroad and has offices in Fiji, Mauritius and
United Kingdom. LIC is associated with joint ventures abroad in the field of insurance,
namely, Ken-India Assurance Company Ltd., Nairobi; United Oriental Assurance Co.
Ltd., Kuala Lumpur, and Life Insurance Corporation (International), E.C. Bahrain. It has
also entered into an agreement with the Sun Life (UK) for marketing unit linked life
insurance and pension policies in U.K.
In 1956-96, LIC had a total income from premium and investments of $5 billion while
GIC recorded a net premium of $1.3 billion. During the last 15 years, LIC’s income grew
at a healthy average of 10% as against the industry’s 6.7% growth in the rest of Asia
(3.4% in Europe, 1.4% in the US).
LIC has even provided insurance cover to five million people living below the poverty
line, with 50% subsidy in the premium rates. LIC’s claims settlement ratio at 95% and
GIC’s at 74% are higher than that of global average of 40%. Compounded annual growth
rate for Life insurance business has been 19.22% per annum.
 HDFC Standard Life Insurance Company Ltd.
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HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life
insurance companies, which offers a range of individual and group insurance solutions. It
is a joint venture between Housing Development Finance Corporation Ltd. (HDFC Ltd.),
India’s leading finance institution and The Standard Life Assurance Company, a leading
provider of financial services from the United Kingdom.
 Max New York Life Insurance Company Limited

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

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

Birla Sun Life Insurance Company Ltd. is a joint venture between Aditya Birla Group
and Sun Life financial services of Canada.
 Reliance Life Insurance Company Ltd.
Anil Dhirubhai Ambani led Reliance life insurance is only private major life insurance in
India which is working as a single group. Reliance life insurance has insured more than
1.7 million people just in two years of its operation. It is awarded ISO 9001:2000 for all
its processes.
 Tata AIG Life Insurance Company Ltd.

 SBI Life Insurance Company Limited
 ING Vysya Life Insurance Company Private Limited
 Allianz Bajaj Life Insurance Company Ltd.
27
 Metlife India Insurance Company Pvt. Ltd.
 AMP SANMAR Assurance Company Ltd.
 Dabur CGU Life Insurance Company Pvt. Ltd.
BAJAJ ALLIANZ GENERAL INSURANCE:

Bajaj Allianz general insurance is the largest general insurance in India. It’s joint venture
between Bajaj Auto and Allianz AG.
ICICI LOMBARD:
ICICI Lombard General Insurance India Ltd. is a 74:26 joint venture between ICICI Bank
ltd. and Canada based $ 26 billion Fairfax financial holding ltd. ICICI is India’s second
largest bank while Fairfax financial is a diversified financial corporate engaged in general
insurance, reinsurance, insurance claim management etc. ICICI Lombard get general
regulatory in August 2005.
28
HOW TO MANAGE RISK BY INSURANCE
Today financial advisor have to have a clear understanding of the risk involved to his client. Also
the broker should be able to integrate risk control system in the management of a business.
Insurance is all about managing risk. Risk has to be continuously

managed. So continuous risk improvement system can be used as a routine process.
There are six stages of continuous risk improvement.
Stages of continuous Risk Improvement
Measure
Execute Idetify
Design Analyze
29
IDETIFY- Risk and opportunity go hand in hand in any business. Risk in itself prerequisite to
progress. Therefore identification of the opportunity has to be the first step in continuous risk
improvement.
Identification of probable risk helps to mitigate the effect of the problems by converting of the
projects to measurable risk.
ANALYZE- After identification of risk, the second step is to do analyze. Analyze helps to
answer various question like “What needs to be done”, “How it needs to be done”, “Which
activity is relatively more important than other.
EVALUATION- This activity provides better awareness of the risk by qualifying the expected
impact, probabilities and time frame of the risk.
DESIGN- After evaluating the risk profile of an individual the product should be design in such
a way that can be best suited in portfolio to mitigate risk of the portfolio.
EXECUTE- This is the final stage of continuous risk improvement process. After identifying,
analyzing, evaluating and design for the portfolio it is important to execute the process.
CONCLUSION-
Traditionally the insurance business offered solutions on the risk of material damage due to
natural calamities, business interruptions, machinery breakdown etc.
Then it focused heavily on asset protection blending with risk consulting. Now it has enlarge its
domain and deals in a variety of areas including health, safety and hygiene in occupation,
property loss control, risk profiling of natural calamities, evaluation ,design and maintenance of
projects risk analysis of technology and disaster recovery.
So the insurance advisors have to be exposed to divergence between
industries and do well aware of the governance, merger and acquisition, private equity
investment and FR.
30
METHODOLOGY
31
RESEARCH METHODOLOGY
Statement Of Problem:
The research is carried on in a proper planned and systematic manner.
The research was initially a telephonic research. We had to call people for fixing a
meeting with our senior regarding insurance from the data given by our organization.
The people whom we were calling includes High Net worth Individuals (HNIs), Mutual
Fund brokers (AMFI List), doctors etc.
During the telephonic we had to explain different products by explaining the benefits of a
particular product.
Age limit for telephonic calls to people about product/policies was 1 month to 60 yrs –
this mean that a policy can be sold to person between the age of 1 month to 60 yrs and
not anything exceeding or below it.
I personally visited the existing client to understand their needs and risk pattern.
Visited the suburban area near Ahmadabad like Mehasana and Sanand to understand
their view on Insurance.
Research Design:
The research design of this project is exploratory in nature. I have taken a sample from existing
client of Insurance and the prospective client. The objective was to generate maximum insight
from small sample size. The primary data is qualitative and analyzed accordingly. I analyzed on
secondary data as well to understand better.
32
METHODOLOGY
Every project work is based on certain methodology, which is a way to systematically solve the
problem or attain its objectives. It is a very important guideline and lead to completion of any
project work through observation, data collection and data analysis.
According to Clifford Woody,
“Research Methodology comprises of defining & redefining problems, collecting, organizing

&evaluating data, making deductions &researching to conclusions.”
Accordingly, the methodology used in the project is as follows: -
Defining the objectives of the study
Framing of questionnaire keeping objectives in mind (considering the objectives)
Feedback from the employees
Analysis of feedback
Conclusion, findings and suggestions.
Sampling Technique Used:
This research has used convenience sampling technique.
(1) Convenience sampling technique:
Convenience sampling is used in my exploratory research . As the name implies, the

sample is selected because they are convenient.
Selection of Sample Size:
For the survey, a sample size of 50 from existing customer and 50 from prospective client is
taken.
33
Sources of Data Collection:
Research is based on two sources:
1. Primary data
2. Secondary data
(1) PRIMARY DATA:
Questionnaire: Primary data was collected by preparing questionnaire for customers. The
questionnaire was filled through direct interaction with client.
(2) SECONDARY DATA:
Secondary data will consist of different literatures like books which are published, articles,
internet, the company manuals, the IRDA regulations and relevant websites.
In order to reach relevant conclusion, research work needed to be designed in a proper way.
This research methodology also includes:-
Familiarization with the concept of insurance and its various terms.

Thorough study of the information collected.
Conclusions based on findings.
Statistical Tools Used
The main statistical tools used for the collection and analyses of data in this project are:
Questionnaire
Pie Charts
Bar Diagrams
34
ANALYSIS
35
ANALYSIS AND INTERPRETATION
OCCUPATION
Occupation
5%
37% Business
Salaried
42% Professional
Others
16%
Interpretation:-
From the sample size we contacted 37% were businessmen, 16% were salaried people, 42% were
professional, and rest 5% were engaged in other activities(homemaker or without job). Which
shows that in today’s scenario professional and businessmen are more likely to do investment in
Insurance.
36
EDUCATIONAL QUALIFICATION
Below 10th std

Under graduate
Graduate
Postgraduate
Interpretation:-
My sample consist of 13 people below secondary standard, 21 clients are undergraduate, 27

people who have done graduation and 39 people most of them are high net worth individual have
done post graduation.
37
Have you Purchased Insurance?
32%
Yes
68% No
Interpretation:-
Out of 100 people I surveyed 65 people have purchased at least insurance before and 35 people
have not purchased any insurance yet.
38
Number of Insurance Held by the Customer
Exactly 1 56
Exactly 2 8
Exactly 3 1
More than 3 0
1% 0%
8%
Exactly 1
2
3
56% >3
Interpretation:
Out of 65 respondents 56 people have 1 Insurance policy, 8 people have 2 Insurance policy and
only 1 respondent has 3 policy.
39
Percentage of Respondents according to number of policy
Age No. of Insurance1 2nd Uninsured Total

people Insurance
15-25 4 4 0 7 11
25-35 16 14 2 10 26
35-45 16 15 1 9 25
45-60 15 12 3 6 21
60 12 8 4 3 15
above
Interpretation:
In my analysis I have segregated customer in different age group. And found that in age group of
15-25 there are 11 people and 4 of them have one Insurance policy and 7 of them are not insured.
In age group between 25 and 35 (out of 26), 14 people have 1insurance policy while 2 people
have two Insurance and 10 are uninsured.
And the correlation between age group of 45 to 60 is much higher than any other group.
40
Have you heard about Micro-Insurance
33%
No
Yes
67%
While studying on suburban area it is found that only 33% of people have heard about such
product before.
Micro Insurance is a vast area where insurance company can explore their business. The IRDA is
focusing on such sector to help the people who having very low income.
41
Determinants of Insurance in suburban area
Determinants Rank Percentage (%)

Agents 1 53
Company 4 9
Features 5 8
Risk Coverage 2 12
Product Flexibility 3 10
Maturity Period 6 5
There are several determinants which work in customer of suburban area for deciding the
purchase of Insurance.
62% of decision involved with non product attribute like agents and company name.
Only 38% decision involved with product attribute.
53% people depends on agents personalized service and there advice.
12 % determinants of purchasing decision depend on the risk coverage ability of the product.
Then product flexibility, its liquidity, maturity period also great determinants factor.
42
WHICH INSURANCE POLICY DO YOU HAVE
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
LIFE general both none
Interpretation:
Most people have both the insurance and very few have no insurance at all.
43
WHICH CO’S INSURANCE POLICY YOU HAVE

PURCHASED?
4% 3%
7% 13%
6%
ICICI
LIC
SBI
TATA AIG
67% RELIANCE
HDFC
Interpretation:-
67% of people invest in LIC because it is a government company they feel it is less risky to
invest in LIC. Among Private sector ICICI prudential is a well known name because of its
innovative product.
44
In such recessionary market which are the product you

prefer to purchase:
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Insurance with Govt. Bond FD Mutual FUND Equity
guranteed NAV
Interpretation:
In recessionary period people prefer to Insurance policy which have guaranteed NAV to hedge
the risk of investment. People prefer product like TATA AIG highest NAV scheme or ICICI pru.
Guaranteed return scheme. Another reason is tax benefit U/S 10C.
Second most preference is govt. bond because it is comparatively less risky instrument.
Though few people believe this is the right time to invest in mutual fund or equity because most
of the equity script at their lowest price.
45
PROJECT ON LEAVE ENCASHMENT POLICY
During our SIP we did one project for Reliance Life Insurance in which we compared 7 life
insurance companies i.e. Reliance Life Insurance, SBI Life Insurance, HDFC Standard Life
Insurance, LIC, ICICI Prudential, Bajaj Allianz and Birla Sun Life Insurance on different
parameters like Joint Venture, Returns, Entry load, Exit Load, Surrender Charges, Fund
Management Charges, Fund Management Charges, Asset under Management, Credit Rating, etc.
Gujarat Water Supply and Sewerage Board (GWSSB) have to give a project of Rs. 40 crores
which is related to group insurance of employees leave encashment for which Reliance is also
bidding.
Product HDFC Standard Life

Features Reliance SBI Insurance LIC
It's a joint venture
SBI have stake of between Housing
74% and BNP Development Finance
100% Reliance Paribas arm Card Ltd. (HDFC) India and
Joint Capital Owned if have stake of UK based Standard Life
Venture Company 26% Co. and ratio is 81.4:18.6 No Joint Venture
11% returns in
11.4%(for last 3 2007-08 and for 9% to 9.3%(2006-
years)Check details check 07) and for details
Returns sheet no. 1 sheet no. 2 Check sheet no. 3 check sheet no. 4
Entry load NILL NILL NILL Waived off
1st year-2%,
2nd year-1.5%,
3rd year-1%,
Exit Load from 4 the- Nil 2% to 6% NILL 2% to 9%
1st year-2%,
2nd year-1.5%,
Surrender 3rd year-1%,
Charges from 4 the- Nil Not Mentioned NILL Nill
Fund
Management FMC are there Not declared. But
Charges 0.25% but not specified 0.80% may charge 5-6%
46
Rs.250000Cr. and
Rs. 50000Cr. Of
assets Under
Management for
Employer
Assets under Employee
Management Rs. 10000 Cr Rs. 1666.69 Cr Rs. 8200Cr. Segment
AAA/Stable by
Crisil, A+ & F1
Credit by Fitch & AAA by CRISIL, AAA by CRISIL &
Rating ICRA iAAA by ICRA ICRA Not mentioned
12 switches are free

52 free switches Are there but per annum beyond that
Switching Charges per year no mentioned Rs. 40 per Switch Nill
No fund No fund
Fund Option 14 Option 8 option
Solvency
Ratio(2005-06) 2 2.9 2.9 1.3
Bonus Unit Not Not
Allocation Will be available mentioned Not mentioned available
Capital Protection/ Will be there for short

guarantee Will be available Yes term period only NO
Steel
Steel Authority of
Authority of India,
India, Visakhapatn
Visakhapatna am Post
Jet m Post trust, trust,
Airways,Infotech,I Rashtriya Rashtriya
BBP,UTI,GAIL, Chemicals & SAIL,KPMG,ITC,M& Chemicals
Key Clients BHEL fertilizers N,Accenture & fretilizers
Reliance Life Received ISO
Insurance has been 9001: 2000
accorded the ISO certification
9001-2000 for superior NOT
certificate, making claim CERTIFIE
ISO Certified it the second life settlement NOT CERTIFIED D
47
insurance process
company in the
country to get
The clients
All Investment can choose
have a distinct any one of
identity in a pool the four
of funds which funds viz:
leads to Bond Fund,
transparency, Pool of fund, Income
avoids elements of no distinct Fund,
cross subsidy and identity. only Balanced
a flexible 80-20%ratio Fund and
investment like balanced Growth
Unit Linked choices. fund. Not mentioned Fund.
Product
Features ICICI Bajaj Allianz Birla sun life insurane
It's a joint venture

between ICICI Bank
and Prudential Plc. It's a joint venture Aditya Birla Group and
Of UK and ratio is between Allianz Group Sun Life Financials
Joint Venture 74:26 (AG) and Bajaj Auto. (74:26)
9.2% to 9.6%(depending
on the tenure,
guaranteed) and for
Returns Check sheet no. 5 Check sheet no. 6 details check sheet no. 6
Entry load NILL Not available NILL

1st year-2%, 2nd year-
1.5%, 3rd year-1%, from
Exit Load NILL 4 the- Nil NILL
100% of bonus unit

Surrender allocation if policy is Applicable if extra bonus
Charges surrendered in first 7 Not available allocation is availed
48
years
Fund management charge

is 1.0% per annum for all
funds, except for the
Growth Multiplier Fund
at 1.25% p.a. The fund
management charge can
Fund be increased by us at any
Management time (subject to IRDA
Charges 0.55% 1.00% approval) upto 1.50% p.a.
Employee benefit
Assest under space is over
Mangement Rs.2000cr. Not available Rs. 4500 cr.
AA+ by S&P,AAA By
Duff and Phelps, A++ by
Credit Rating AAA by fitch Not available A.M. best
Three free
switches every Free unlimited amount exceed
Switching policy year are Rs. 5000, Charges Rs. 100 per
Charges NIL available Switches for less than Rs. 5000
Fund Option 4 3 9
Solvency
Ratio(2005-06) 1.6 Not available 2
Bonus Unit 1% to 5% depending on
Allocation 2% of the Corpus NILL requirement
offer a
guaranteed
return on
capital of
6.3%c for
Rs.25cr. Up to On Some Funds like Unit Linked
Capital 28th Feb,2009 Fund Option,Contribution
Protection/ with 3 year remaining in funds for 3years or
garuntee Not available lock in period 5 years
49
BPCL,HCL,WIPRO,
Key Clients ICICI Bank Not available SAIL,KPCL,ITC,L&T,ORACLE
One of the first distribution
NOT houses to be ISO 9001:2000
ISO Certified NOT CERTIFIED CERTIFIED certified.
The product is intended for both
It provides three pension and non-pension
scheme options: schemes. Pension schemes are
Maximiser, which those, which need tax approval
has a skew towards and also to purchase annuity for
equities; Protector, payouts, without any life
which is biased insurance cover. Non-pension
towards debt; and schemes are granted an
Balancer, a blend of automatic life insurance cover of
the Maximiser and Balanced, Debt Rs.1000/- per member under this
Unit Linked Protector. and Equity product.
Allocation of funds
Name of company Funds allocated Remarks
RELIANCE Rs. 20 Crore Fund management charges are least at
0.25%, Asset under management is Rs.
10000Cr and last 1 year avg. return is
11%
LIC Rs.5crore May charge 5-6% Fund management
charges, Asset under management is Rs.
50000Cr and last 1 year return is very
less.
ICICI Rs.5crore Fund management charges are 0.55%,
Asset under management is Rs. 2000Cr
and last 3 months avg. return is 4%.
SBI Rs.10 crore Asset under management is
Rs.1666.69cr,2yr return from the bond
pension fund is 10.20%
50
Reliance Life Insurance(Rs. 20 Cr)
Name of funds Amount allocated Returns(last 3 year) Remarks

ULIP Corporate Bonds Rs. 4 crore 11.05% Good Return
ULIP GILT Funds Rs. 6 crore 10.83% long term investment,
minimum risk and
also high return.
ULIP Money Market Rs. 5 crore 11.19% Short term
Bonds investment, minimum
risk and high return
Ulip Capital Secure Rs. 5 crore 10.33% though the risk is
minimum bt return is
less.
LIC(Rs.5 Crore)
Name of funds Amount Returns Remarks
LIC Jeevan Plus Plan Rs. 5 crore 8%(last 3 last 3 months return is 9.9%and last 2 years
years return) return is 12.6%
LIC Market Plus bond Rs.3 crore 11.8%(last 2 last 3 months return is 6.2% and last 2 years
years) return is 11.8%
LIC Money Plus Bond Rs. 2 crore 10.2%(last 2 last 3 months return is 6% and last 2 years
years) return is 10.2%
ICICI(Rs.5 Crore)
Name of funds Amount Returns(last 3 Remarks

months)
ICICI Pru Group Rs. 10 10.40% Guaranteed returns and the returns are
Capital Guarantee - crore maximum
Income Fund II
51
SBI(Rs.10 Crore)
Name of funds Amount Returns (for Remarks
3 months)
SBI Life - Unit Plus Rs. 3 8.30% new fund and last 3 months return is 8.3 %
Elite Bond Fund crore
SBI Life - Horizon II Rs. 2 5.10% yearly return is 8.8%
Bond Pension Fund crore
Please note: allocation should be done only in BOND Funds as the returns are good and
safe.
52
FINDINGS OF THE STUDY
 Insurance not only helps to reduce financial risk but also various risk involved with
any individual or any organization. It is a sector which has many opportunities in near
future.
Air India has been looking for fog Insurance.
E-business Insurance is another opportunity on which IRDA thinking of.
 Suburban has lot of potential for all types of goods and services. It is the segment of
population that needs to be tapped. This is the market insurance company needs to
create the desire of insurance. In this segment the people age group 25-45 is most
productive. Till now it was not a lucrative market. But the youngster now is going in
city for education so they are getting aware of the product of Insurance. And the
growing number of nuclear family and fear of social security young people needs the
old age security.
 Liberalization of this sector has offered tremendous opportunities to enter private
players. In India insurance penetration is very low. It helps to accelerating insurance
penetration.
 The government is likely to increase FDI from 26% to 49%. More M&A is following
up in next few years.
 The IRDA has framed and notified micro insurance regulations on 2005. The
insurance company is asked to make innovative insurance products to meet the needs
of people involved in micro finance. The microfinance coverage targets low-income
group of people with irregular and unstable income patterns. It also covers the assets
purchased with micro credit.
 Different individual has different risk taking ability it depends upon their age, their
occupation and family background.
 How to do financial planning of an individual.
 My project period stars on February and that period of time people were more
interested to invest in tax saving scheme. To understand the customer need is very
important and that help to get good business even in recessionary market.
53
LEARNINGS FROM SIP
 My SIP in Opulence Business Solution really gives me a practical exposure. I got

the opportunity to see closely how corporate world really work.
 During my SIP I have met with CAs, HNI client, Mutual Fund broker to
convince them for investing in Insurance. So that gives me immense confidence.
 I have observed what people think or consider before investing in financial
instrument.
 How badly recession affects on customer investing pattern.
 We have done some activities like camps at Komal Enclave, Parimal Garden
and Prahlad Garden to give consumer the idea of health insurance and give
knowledge on mutual fund.
 I have learnt that making relationship is most important thing for further business
for the company.
 Knowledge on cross functional area is also important to solve the query of client
like little knowledge on taxation, the point of difference between Insurance and
mutual fund, why should anyone invest in insurance etc.
 I have also learned how a financial consultancy firm do their business, it will
really help me to In future in my job.
54
RECOMMENDATIONS
 Opulence is a new consultancy firm. So it should concentrate on building relationship
first. Because once the relationship builds business will come more easily.
 There should be proper guidance for the people who works there. The company’s vision
and mission statement should be clear to all.
 Opulence should not ignore the small and medium enterprise, as the can be good source
of business in future.
 Opulence should convey the customer grievance to the respective company, so they can
improve upon their product.
 LIC policies may not have to gov. guarantee in near future, it is therefore suggested govt.
should allow the LIC to go for public issue. Because any insurance has to maintain
solvency margin fixed by IRDA.
 Government should encourage insurers by offering tax incentives rather than imposing
service tax and cess on it. No service is done by Government.
 ULIP is a long term investment and that must be brought to the notice of the customer.
 Mortality and Morbidity table should be redesign.
 Insurance company should design tailor made and innovative products to trap rural
market.
 Investment guidelines for insurance company prescribed by the regulators must be
changed to allow and promotes insurance funds by the corporate sector and infrastructure
projects.
 FDI should allow 26% to 49%. It’s a capital intensive industry. Indian Insurance
Company needs capital.
 Special efforts should be made to spread message of insurance to rural needy people.
 Dematerialization of LIs proposed by Dr. APJ Abdul Kalam should be implemented. In
developed countries they can sell before maturity in secondary market.
 Derivative can be used in Insurance Company to hedge risk in time of recession.
55
LIMITATIONS OF STUDY
There are some unavoidable limitations of my study. So it might not show 100% accuracy in
result. If the constraint were not there it could have shown more accurate picture. Some of the
limitations are:
 Time constraint was most important I believe. Because at the same time I had to do my
project as well as internship.
 If I could take more sample size it would reflect the population more accurately.
 There was limitation in resources.
 Because of poor market scenario people were less interested to talk about their
investment planning.
 Some biasness for certain company or product could not be eliminated.
56
ANNEXTURE
57
Questionnaire
NAME: __________________________________________ AGE: _________
GENDER: M F MARITAL STATUS: Single Married
CONTACT NO.______________________ E-MAIL ID: ____________________________
ADDRESS. .______________________ ______________________.______________________

.______________________.______________________
1. Occupation:
Business/Self Employed Salaried Professional
Others___________________
2. Educational Qualification:
Under-Graduate Graduate Post- Graduate
Others_____________________
3. Do You Invest Your Money?

Regularly Occasionally Never
4. Where Do You Invest?

Savings A/C Insurance Mutual Funds
Govt. Bonds’ Fixed Deposits Real Estate
Stock Market Others_____________
58
5. WHICH INSURANCE POLICY DO YOU HAVE?
LIFE General BOTH
6. WHICH CO’S INSURANCE POLICY YOU PREFER THE MOST? (RANK THEM)
a) LIC
b) ICICI PRUDENTIAL
c) SBI LIFE INSURANCE
d) ING VYSYA LIFE
e) OM KOTAK MAHINDRA
f) TATA AIG LIFE
g) ANY OTHER ________( Specify)
7. WHICH FEATURE OF YOUR POLICY ATTRACTED YOU TO BUY IT?

(RANK THEM)
a) LOW PREMIUM
b) LARGER RISK COVERANCE
59
c) MONEY BACK GUARNTEE
d) REPUTATION OF COMPANY
e) EASY ACCESS TO AGENTS
f) ANY OTHER ________(Specify)
8. WHAT’S YOUR PERCEPTION ABOUT INSURANCE?

(RANK THEM)
a) A SAVING TOOL
b) A TAX SAVING DEVICE
c) A TOOL TO PROTECT FUTURE
9. HOW HAS/WOULD YOU BOUGHT/BUY AN INSURANCE?
a) CUSTOMER APPROCHED INSURANCE COs
b) INSURANCE COs APPROCHED CUSTOMER
10. ARE YOU SATISFIED WITH THE POLICY?
60
a) SATISFIED SAVING TOOL
b) NOT SATISFIED
c) NOT RESPONDING
11. ARE YOU SATISFIED WITH THE SERVICE AGENT?
a) SATISFIED SAVING TOOL
b) NOT SATISFIED
c) NOT RESPONDING
12. WHAT’S THE RIGHT AGE TO BUY INSURANCE?
a) AFTER 15-25yrs
b) AFTER 25-45 Yrs
c) AFTER 45-60 Yrs
d) Above 60 Yrs
61
13. WHAT WOULD YOU LOOK FOR IN AN INSURANCE COs?

(RANK THEM)
a) A TRUSTED NAME
b) FRIENDLY SERVICE & RESPONSIVENESS
c) GOOD PLANS
d) ACCESSIBILITY
14. Have you heard about Micro Insurance?
a) Yes b) No
15. How many policies do you have?
a) Exactly 1 b) Exactly 2 c) Exactly 3 d) more than 3
16. Determinants of purchase decision in Life Insurance.
a) Agents b) Company c) product features d) Risk Coverage e) Maturity Period
62
BIBLIOGRAPHY
www.irda.com
www.fxfxnet.com
Financial risk management, by TATA McGraw-Hill
www.insurance.ind.com
www.moneyoutlook.com
www.cifainsurance.com
www.bimaonline.com
www.icicipru.com
www.licindia.org
www.moneycontrol.com
www.financialtimes.com
63

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Risk Management Via Insurance And Its scope in Suburban Area

(OPULENCE BUSINESS SOLUTION PVT.LTD)

Faculty Guide Company Guide

FINDINGS OF THE STUDY ............................................................................................................................ 53

Objective of the project are

To understand the risk appetite nature of different individual.

The project has given me a practical exposure of the working culture of an

The Range Of SERVICES Provided By Opulence Includes:

Opulence Private Wealth Management

Distress Asset Management & Asset Reconstruction Solutions

Risk Management is the identification, assessment, and prioritization of risks followed by

1. Identify, characterize, and assess threats

RISK MANAGEMENT PROCESS

Rate of occurrence multiplied by the impact of the event equals risk

Potential risk treatments

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Liberalization of Indian Insurance:

To set up an independent regulatory body, that provides greater autonomy to Insurance

Indian Insurance in 21st Century:

IRDA (INSURANCE REGULATORY AND

Composition of Authority under IRDA Act, 1999

The Authority is a ten member team consisting of

(all appointed by the Government of India)

Duties, powers and Functions of authority:

(e) promoting efficiency in the conduct of insurance business;

(k) regulating investment of funds by insurance companies;

(l) regulating maintenance of margin of solvency;

(m) adjudication of disputes between insurers and intermediaries or insurance

(n) supervising the functioning of the Tariff Advisory Committee;

(q) exercising such other powers as may be prescribed

The functions of Insurance can be bifurcated into two parts:

The primary functions of insurance include the following:

Assessment of risk- Insurance determines the probanle volume of risk by evaluating

Provide certainty- Insurance is a device, which helps to change from uncertainty to

The secondary functions of insurance include the following:

Prevention of losses- Insurance cautions individual and businessman to adopt

Contributes towards the development of larger industries- Insurance

The other functions of insurance include the following:

Means of savings and investment- Insurance serves as saving and investment,

Source of earning foreign exchange- Insurance is an international business. The

MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN

 Life Insurance Corporation of India (LIC)

 HDFC Standard Life Insurance Company Ltd.

 Max New York Life Insurance Company Limited

 ICICI Prudential Life Insurance Company Ltd.

 Birla Sun Life Insurance Company Ltd.

 Reliance Life Insurance Company Ltd.

 Tata AIG Life Insurance Company Ltd.

BAJAJ ALLIANZ GENERAL INSURANCE:

HOW TO MANAGE RISK BY INSURANCE

Insurance is all about managing risk. Risk has to be continuously

Stages of continuous Risk Improvement

The research is carried on in a proper planned and systematic manner.

According to Clifford Woody,

“Research Methodology comprises of defining & redefining problems, collecting, organizing

Accordingly, the methodology used in the project is as follows: -

Defining the objectives of the study

Framing of questionnaire keeping objectives in mind (considering the objectives)

Feedback from the employees

Conclusion, findings and suggestions.

Sampling Technique Used:

This research has used convenience sampling technique.

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