Marketing Reliance Life Insurance

RELIANCE LIFE INSURANCE
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INDEX
1. INTRODUCTION TO THE TOPIC 1
2. OBJECTIVES 2
3. SCOPE OF THE STUDY 3
4. COMPANY PROFILE 4
5. RELIANCE CAPITAL 6
6. PRODUCTS OFFERED BY RELIANCE LIFE 10
7. OVERVIEW OF INSURANCE SECTOR 29
8. THE IRDA 56
9. MARKETING AND DISTRIBUTION STRATEGIES 62
10. RESEARCH METHODOLOGY 77
11. DATA ANALYSIS 80
1 12 2. . F FI IN ND DI IN NG GS S 9 95 5
13. LIMITATION 97
14. QUESTIONNAIRE FOR CUSTOIMERS 99
15. QUESTIONNAIRE FOR SALES OFFICERS 101
16. QUESTIONNAIRE FOR ADVISERS 103
17. BIBLIOGRAPHY 106


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Introduction to the project
Reliance Life Insurance Company Limited is a part of Reliance Capital
Ltd. of the Reliance - ANIL DHIRUBHAI AMBANI Group. Reliance Capital is
one of Indias leading private sector financial services companies, and ranks
among the top 3 private sector financial services and banking companies, in
terms of net worth. Reliance Capital has interests in asset management and
mutual funds, stock broking, life and general insurance, proprietary investments,
private equity and other activities in financial services.
Yet, nearly 80 per cent of Indian population is without life insurance
cover while health insurance and non-life insurance continues to be below
international standards. And this part of the population is also subject to weak
social security and pension systems with hardly any old age income security.
This itself is an indicator that growth potential for the insurance sector is
immense.


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Title of the Project

Marketing strategy of reliance life insurance

OBJECTIVES

1. To study the companys procedures conducted by the company for
marketing of products to the customers.

2. To study the current market trends in Customer Relationship
Management.

3. To study the companies efforts in maintaining and motivating the advisors
for retaining an existing customer and building a new customer


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SCOPE OF THE STUDY

To understand the relations maintained by the Reliance Insurance
Company with its customers. Ever increasing competition, low interest rates,
and declining margins have driven firms to discover the customer as the basic
element in their business equation Insurance as a sector has shown tremendous
growth in recent years. People now are becoming more secured in terms of their
life as well as their money. They want a profitable benefit out of their
investment. There is a need to know the companies efforts towards convincing
the customer about their product and to know how to create loyal customers.
Insurance happens to be a mega opportunity in India. Its a business growing at
the rate of 15-20 per cent annually and presently is of the order of Rs 450 billio


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PROFILE OF THE COMPANY

RELIANCE LIFE INSURANCE CO. LTD.
Few men in history have made as dramatic a contribution to their countrys
economic fortunes as did the founder of Reliance, Shri. DHIRUBHAI
AMBANI. Fewer still have left behind a legacy that is more enduring and
timeless.
As with all great pioneers, there is more than one unique way of describing
the true genius of DHIRUBHAI: The corporate visionary, the unmatched
strategist, the proud patriot, the leader of men, the architect of Indias capital
markets, the champion of shareholder interest.
But the role Dhirubhai cherished most was perhaps that of Indias greatest
wealth creator. In one lifetime, he built, starting from the proverbial scratch,
Indias largest private sector enterprise.
When Dhirubhai embarked on his first business venture, he had a seed capital
of barely US$ 300 (around Rs 14,000). Over the next three and a half
decades, he converted this fledgling enterprise into a Rs 60,000 crore
colossusan achievement which earned Reliance a place on the global
Fortune 500 list, the first ever Indian private company to do so.
Dhirubhai is widely regarded as the father of Indias capital markets. In 1977,
when Reliance Textile Industries Limited first went public, the Indian stock


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market was a place patronised by a small club of elite investors which
dabbled in a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time
retail investors to participate in the unfolding Reliance story and put their
hard-earned money in the Reliance Textile IPO, promising them, in exchange
for their trust, substantial return on their investments. It was to be the start of
one of great stories of mutual respect and reciprocal gain in the Indian
markets.
Under Dhirubhai extraordinary vision and leadership, Reliance scripted one
of the greatest growth stories in corporate history anywhere in the world, and
went on to become Indias largest private sector enterprise.
Through out this amazing journey, Dhirubhai always kept the interests of the
ordinary shareholder uppermost in mind, in the process making millionaires
out of many of the initial investors in the Reliance stock, and creating one of
the worlds largest shareholder families.


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RELIANCE CAPITAL

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of
the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias
leading private sector financial services companies, and ranks among the top 3
private sector financial services and banking companies, in terms of net worth.
Reliance Capital has interests in asset management and mutual funds, stock
broking, life and general insurance, proprietary investments, private equity and
other activities in financial services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company
(NBFC) registered with the Reserve Bank of India under section 45-IA of the
Reserve Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial
services sector in India and aims to become a dominant player in this
industry and offer fully integrated financial services.
Reliance Life Insurance is another step forward for Reliance Capital Limited
to offer need based Life Insurance solutions to individuals and Corporate.
Reliance capital entered into the life insurance business by acquiring AMP
Sanmar in October 2005. The business was thereafter renamed Reliance Life
Insurance. Today RLIC has over 20 products - 16 individual plans and 4
employee benefit plans - including the two new innovative products Connect
to Life and Reliance Money Guarantee Plan - that were launched recently.


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Reliance Life Insurance Company (RLIC) has been accorded the ISO 9001-2000
certificate for its best-in-class management systems in Quality, Customer &
Process orientation.
With this, RLIC is one of the only two life insurance companies in India to get
ISO 9001:2000 certifications covering all functional areas.
The scope of the certification covers the entire gamut of business processes
ranging from product design, sales - front-end and back-end operations,
customer care and investment, to all business support functions. The
certification has been awarded by internationally acclaimed Bureau VERITAS
and is valid till 2010 subject to continued satisfactory operation of RLIC's
Quality Management System.
"This certification is a significant milestone in our continuous quest to offer
innovative products, outstanding services and improved customer satisfaction. It
indicates that we have been able to install systems, processes & performance
measures that are in line with the best in the industry and will form the basis
of our business growth in future", said P Nandagopal, CEO, Reliance Life
Insurance Company.
Reliance Life Insurance is the fastest growing life insurance company in India
and has an incremental market share of 4 per cent amongst private insurers. The
company has third largest distribution network in terms of number of agents
operating out of 143 locations across the country.


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CORPORATE OBJECTIVE
At Reliance Life Insurance, we strongly believe that as life is different at every
stage, life insurance must offer flexibility and choice to go with that stage. We
are fully prepared and committed to guide you on insurance products and
services through our well-trained advisors, backed by competent marketing and
customer services, in the best possible way.

CORPORATE VISION AND MISSION
Vision
Empowering everyone live their dreams
Mission
Create unmatched value for everyone through dependable, effective, transparent
and profitable life insurance and pension plans.

Our Goal
Reliance Life Insurance would strive hard to achieve the 3 goals mentioned
below:
Emerge as transnational Life Insurer of global scale and standard
Create best value for Customers, Shareholders and all Stake holders
Achieve impeccable reputation and credentials through best business practices


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Achievements
RLIC has been one of the fast gainers in market share in new business
premium amongst the private players with an incremental market share of
4.1% in the Financial Year 2007-08 from 3.9% in April 07 to 8% in Feb
08. ( Source: IRDA)
Also continues to be amongst the fast growing Private Life Insurance
Companies with a YOY growth of 195% in new business premium as
of Mar08.
A Company that has crossed 1.7 Million policies in just 2 years of
operation, post takes over of AMP Sanmar business.
Initiated Express Life an Unique Over the Counter sales process for
Unit Linked Insurance Policies in the Industry.
Accomplished a large distribution ramp-up in the Industry in a short span
of time by opening 600 branches in 10 months taking the overall branch
network above 740.
RLIC continues to be one of the two Life Insurance companies in India to
be certified ISO 9001:2000 for all the processes.
Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007-
Certificate of Merit in the Financial Services category by Council for
Fair Business Practices (CFBP).


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PRODUCTS OFFERED BY RELIANCE LIFE
Reliance has number of insurance products in its Portfolio. It offers different
products for different customer profile. It targets its product according to the
needs of people which make them its customer.

Protection Plans
In todays uncertain world, there could be calamity at every step of the life. It is
up to you to ensure that your family stays protected always.
Reliance Protection Plans helps you do exactly the same. You have a wide range
of options to choose a plan from. Right from limited period plans to lifetime
protection plans, you can opt for the one that suits your lifestyle.
While we understand that nothing can compensate for the loss of a life, we
intend to provide you the peace of mind. Investing in Reliance Protection Plans
would mean your familys future is in safe hands.
1.Reliance Term Plan
Invest in the Reliance Term Plan, a pure life insurance plan that offers you
comprehensive and affordable coverage for a limited period of time to suit your
needs.
2. Reliance Simple Term Plan
Make a smart investment move by investing in the cost-effective Reliance
Simple Term Plan, which offers you comprehensive coverage for a specified
period of time to suit your need.


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4. Reliance Special Term Plan
Imagine a life insurance policy, which on maturity returns to you all the
premiums you had paid for your basic policy. The Reliance Special Term
Plan offers that and much more.

5. Reliance Credit Guardian Plan
The Reliance Credit Guardian Plan secures your family from any loan
liabilities you have incurred in case of your untimely demise. On survival
at maturity, you will be returned all the premiums paid for the basic
policy.

6. Reliance Special Credit Guardian Plan
Invest in the Reliance Special Credit Guardian Plan and protect your
family from any loan liabilities you have incurred. On survival at
maturity, all premiums paid for the basic policy will be returned to you.

7. Reliance Endowment Plan
The Reliance Endowment Plan gives you financial independence by
allowing you to decide the amount of Sum Assured based on your current
financial position and expected future expenses Dream!!..


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8. Reliance Special Endowment Plan
Imagine an endowment plan that protects you for a certain period even
after you have received your lump sumthat is exactly what the Reliance
Special Endowment Plan offers you with other added benefits.
9. Reliance Connect 2 Life
The Reliance Connect 2 Life Plan gives you the option to upgrade your
life cover to keep pace with your changing lifestyle. As your income
grows, your family will have sufficient cover.
10 . Reliance Whole Life Plan
Give your family a lifetime of timely financial support by investing in the
Reliance Whole Life Plan. This will help you enjoy your life to the fullest.
11 Reliance Wealth + Health Plan
Invest in the Reliance Wealth Health Plan and balance your health needs
and wealth needs, without compromising on either health or wealth.

12 Reliance Cash Flow Plan
Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life
insurance plan and easy liquidity through lump sum cash, which means
you can get a percentage of the Sum Assured at periodic intervals.


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Savings & Investment Plans
In life, you have always given your family whatever they have wanted. Yet,
there are some promises you have to fulfill, such as taking your family for a
vacation, or buying that dream house.
Set aside some money to achieve these specific goals with the help of Reliance
Savings & Investment Plans. The plan allows you to experience the joys of life
and provide for your familys needs.
Enjoy life without worrying about the promises you have madewe are here to
fulfill them.

1. Reliance Super Invest Assure Plan

Reliance Super Invest Assure is a complete plan which addresses your
vital needs like Flexibility, Security, Investment Return and Financial
Planning. With all its key benefits, it is here to ensure that there will
always be more than you can ask for!
2. Total Investment Plan I - Insurance

Reliance TIPS -Series I- Insurance is a Unit Linked Investment +
Insurance Plan that helps you meet all your financial needs, without the
complexity of managing multiple products.


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3. Reliance Wealth + Health Plan


4. Reliance Automatic Investment Plan

The Reliance Automatic Investment Plan is an enhanced unit linked plan
that allows you to choose the right investment mix to reap maximum
benefits. It also provides you with enhanced Life Cover.

5. Reliance Money Guarantee Plan

To reap the benefits of a rising market and to protect yourself from any
market decline, invest in the unit linked Reliance Money Guarantee plan
that gives you the perfect balance between Protection and Savings.

6. Reliance Cash Flow Plan

Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life
insurance plan and easy liquidity through lump sum cash, which means
you can get a percentage of the Sum Assured at periodic intervals.


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7. Reliance Market Return Plan

The Reliance Market Return Plan gives you insurance protection and
allows you to benefit from investment growth. It works through your life
and meets the changing requirements you may have from time to time.

8. Reliance Endowment Plan

The Reliance Endowment Plan gives you financial independence by
allowing you to decide the amount of Sum Assured based on your current
financial position and expected future expenses.

9. Reliance Special Endowment Plan

Imagine an endowment plan that protects you for a certain period even
after you have received your lump sumthat is exactly what the Reliance
Special Endowment Plan offers you with other added benefits.

10. Reliance Whole Life Plan
Give your family a lifetime of timely financial support by investing in the
Reliance Whole Life Plan. This will help you enjoy your life to the fullest.


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11. Reliance Golden Years Plan
The Reliance Golden Years Plan helps you save systematically and
generate the much-needed corpus to help you enjoy life after retirement.

12. Reliance Golden Years Plan Value

Realize all your dreams of playing golf, or going for a world tour after
retirement by investing in the Reliance Golden Years Plan Value, which
helps you generate the amount you will need for the future.

13. Reliance Golden Years Plan Plus

Invest in the special Reliance Golden Years Plan Plus that not only helps
you build the corpus you need after, but also collects a basic minimum
amount in case something were to happen before you realize your dreams.

14. Reliance Connect 2 Life Plan

The Reliance Connect 2 Life Plan gives you the option to upgrade your
life cover to keep pace with your changing lifestyle. As your income
grows, your family will have sufficient cover.


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Retirement Plans
You are a young and earning individual. The income you earn allows you to
enjoy life, your only worry being whether you will be able to continue the same
lifestyle after retirement.
A Reliance Retirement Plan will help you save money for your retirement. It
ensures that you continue to get some income after retirement thereby ensuring
that you do not have to depend on any other person or make any compromises to
maintain the same lifestyle.
Invest in a Reliance Retirement Plan today and enjoy life after retirement on
your own terms.
1. Total Investment Plan II - Pension

When you invest in the Reliance Total Investment Plan, you give yourself
the assurance that you will make each one of your dreams come true!.

2. Reliance Golden Years Plan

The Reliance Golden Years Plan helps you save systematically and
generate the much-needed corpus to help you enjoy life after retirement.


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3. Reliance Money Guarantee Plan

To reap the benefits of a rising market and to protect yourself from any
market decline, invest in the unit linked Reliance Money Guarantee plan
that gives you the perfect balance between Protection and Savings...

Child Plans
Being a parent is one of the joys of life. Your child looks up to you and depends
on you for love, protection and support. You want to provide your child with the
best in life.
The Reliance Child Plan helps you save systematically so that you can secure
your childs future needs. Be it higher education, his or her first home or any
other requirement, you will always be there for your child when he or she needs
you.
So, invest in a Reliance Child Plan right awayit is the best gift you could ever
give your chi


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Reliance Super Invest Assure Plan

Reliance Super Invest Assure is a complete plan which addresses your
vital needs like Flexibility, Security, Investment Return and Financial
Planning. With all its key benefits, it is here to ensure that there will
always be more than you can ask for!

1. Reliance Child Plan

Save systematically and secure the financial future of your child by
investing in the Reliance Child Plan and let your child enjoy today
without worrying about tomorrow.
2. Reliance Secure Child Plan

Reliance Life Insurance presents a unit linked insurance plan that secures
your childs financial future, leaving you free from worry.
4.Reliance Wealth + Health Plan


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SOME LUCRATIVES PLANS WHICH RELIANCE OFFERS
RELIANCE ENDOWMENT PLAN
It takes a lot for a dream to become a reality. And money is surely an important
part of it.
Reliance Endowment Plan gives you just the financial independence to realize
your dreams in the future. It lets you decide how much you would like to set as
your Sum Assured based on your current financial position and your expected
future expenses.
So, go ahead... dream!!.
Key Features
1 .On maturity receive Sum Assured plus bonuses
2. Wealth creation through bonus additions
3. More Value for your money by way of High Sum Assured Rebate
4. Choose to add the Benefit of three Riders-Reliance Term Life Insurance
Benefit Rider, 5. Reliance Critical Conditions Rider and Reliance Accidental
Death and Total and 6.Permanent Disablement Rider
7. Choose to avail of Policy Loan after three years


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CASH FLOW PLAN
While most insurance plans block your money for a certain period of time,
Reliance Cash Flow Plan gives you the double benefit of life insurance along
with easy liquidity through lump sum cash. It provides money periodically when
you need it.
It lets you live life to the fullest today and at the same time, helps you stay
protected for tomorrow by giving you the flexibility of receiving a specified
percentage of the Sum Assured at specified intervals
Key Features
Easy Liquidity - Get periodic cash flows at the end of the fourth year and
thereafter at the end of every three years
Wealth creation through bonus additions
On maturity, accumulated bonuses along lump sum payout receive with final
More value for your money by way of High Sum Assured Rebate
Full Sum Assured plus bonuses in case of your unfortunate death, this is
over and above the Survival Benefits already paid
Option to add two Riders - Critical Illness Rider & Accidental Death Benefit
and Total and Permanent Disablement Rider


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RELIANCE HEALTH + WEALTH PLAN
UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT
PORTFOLIO IS BORNE BY THE POLICYHOLDER.
There are times when late working hours take precedence over your health
check-ups. And there are times when a visit to the doctor seems more important
than dividends on your shares. In the rat race to make money, we often forget to
take care of ourselves.
We understand this predicament. Here is a plan that will ensure that your wealth
keeps increasing constantly and yet your health does not take a backseat. The
Reliance Wealth+Health Plan. A plan that gives you the benefits of wealth bhi.
health bhi
Life changes. And as it does, so do your priorities. After all, the circumstances
of your life can determine the type of health coverage you need.
India has made rapid strides in the health sector. Since Independence, life
expectancy has gone up markedly and survival rates have also increased, still
critical health issues remain. Infectious diseases continue to claim a large
number of lives.
Perhaps you're a freshly minted graduate, a joyful newlywed, retiring early or
between jobs. Maybe you're running your own business or raising a family or
both. In any of the situations, GOOD or BAD, health cannot be taken for
granted. All are affected by the rising costs of medical expenses. Thats why it is
important to plan early and in advance.


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Reliance Wealth + Health Plan, a health insurance plan underwritten by
Reliance Life Insurance Company Limited, is designed to work in conjunction
with contributions towards savings. The uniqueness of this plan is that it not
only provides benefits for covered injuries but also for other injuries by
encashment from the unit fund. This plan from Reliance Life offers the
Hospitalization and Surgical Benefits and also covers Critical Illnesses. In short
this plan provides you with a personalized quality health cover that fits your
lifestyle.
Key Feature
A Unit Linked plan with Unique Savings Component
Twin benefit of market linked return and health protection
Choose from two different plan options
Flexibility to take care of your familys health
Flexibility to switch between funds / plan options
Option to pay Top-ups
Option to package with multiple riders
Liquidity through partial withdrawals


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RELIANCE SUPERINVESTASSURE PLAN
PORTFOLIO IS BORNE BY THE POLICYHOLDER.
You have always aspired for the best in life. And we help you achieve that.
Heres a unique plan which combines protection and savings. It also offers
complete flexibility to gain control over your investments vis--vis your
financial needs and risk appetite.
We value your regular investments and thus reward you with guaranteed
additions thus promising unmatched benefits. This plan also offers you a unique
option of moving from a conservative fund to an aggressive fund systematically,
to take advantage of the Rupee cost averaging model.
A plan that promises you, what you ought to deserve as you reach greater
heights in life. What more can you ask for except gifting yourself with Reliance
Super Invest Assure Plan
Key features Reliance Super InvestAssure Plan
Twin benefit of market linked return and insurance protection.
Guaranteed additions at the rate of 50% of your first years basic premium at
interval of every 5 years from 10th year till policy is in force
Investment opportunity with flexibility -Choose from 8 pure investment fund
options.
Option to pay Top-up premium(s)


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Liquidity in the form of partial withdrawals
A host of optional rider benefits to enhance protection cover.

RELAINCE AUTOMATIC INVESTMENT PLAN
PROTFOLIO IS BORNE BY THE POLICYHOLDER
Life is indeed delightful if you have the freedom to make choices. The Reliance
Automatic Investment Plan gives you just that ample freedom! And we make
this freedom more enjoyable by giving you a sense of security. Whether its
your insurance or investments, we let you make the choice and leave the rest to
us.
So allow us to take over and you can be rest assured, because for us your LIFE
comes FIRST always.
This plan promise enhanced Life Cover, with complete flexibility to gain control
over your investments in tune with your financial needs and your risk appetite.
A plan that promises you what you deserve as you reach greater heights in life.
For a select few like you, the Reliance Automatic Investment Plan is an
enhanced Unit Linked plan addressing comprehensive needs to strike that
perfect balance of protection and Savings with full flexibility as you grow in
your career. The Reliance Automatic Investment Plan gives you full flexibility
to choose just the right investment mix to reap higher benefits.


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Key Features
Two plan option to choose from Ready-made and Tailor-made
Life Stage asset allocation to ensure automatic change in investment patterns,
under the Ready-made Plan option
Freedom to decide your own fund mix based on your risk profile under the
Tailor-made Plan
Allows Systematic Transfer Plan to average out the cost of unit purchased in
equality
Regular, limited, single premium paying options
Unmatched flexibility through out Exchange Option
Liquidity in the form of partial withdrawal
Option to avail of Accidental Death and Total & Permanent Disability and Term
Insurance riders

RELAINCE TOTAL INVESTMENT PLAN SERIES -1
The journey of life, even though it may seem simple, comes with its own twists
and turns, some good, some unfortunate. And along with these moments come
new dreams. With every little twist, our dreams change and so do our ambitions.
And most of all we desire a security that will help us follow our dreams, both
financial and emotional. It is this security that Reliance Life Insurance Company


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Limited promises to bring to you with its Total Investment Plan Series I
Insurance.
To know more, read further
We value your dreams in this journey of life. Reliance Total Investment Plan
Series I -Insurance (TIPS-I -Insurance) helps you bring them to reality. Your
need for investment, protection and financial liquidity keeps changing at
different stages of life. The birth of a child will require you to increase your
insurance cover; a marriage in the family will require additional money. We
provide you that kind of flexibility which suits you best at your convenience.
Similarly on a promotion you may want to increase your investments to create a
large kitty for future expenses. As you progress on this ladder of life we provide
you the platform to increase your investment. Usually you would require
multiple financial products to meet all your needs and would have to actively
manage them. However with the Reliance TIPS-I -Insurance, Unit Linked
Investment + Insurance Plan you can meet all your financial needs, without the
complexity of managing multiple products
Key Features
This is a Single Premium unit linked savings life insurance plan with options to
purchase the same plan with reduced allocation charges in subsequent policy
years. Since more Premium is allocated towards investment due to lower
allocation charges on subsequent purchases, greater would be the returns.
Purchasing the same plan in the subsequent years is an option.
1st purchase would be called as Classic


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2nd purchase would be called as Silver
3rd purchase would be called as Gold
4th purchase would be called as Diamond
5th purchase would be called as Platinum
Once you purchase the first policy there will full flexibility, as to when second
and subsequent purchase can be made and how much Premium should be paid
for each purchase subject to the following:
The minimum Premium on each purchase should be at least Rs. 25000 for life
assured aged up to 40 and Rs. 50000 for life assured aged 41 to 64.
The maturity date on each purchase cannot exceed 70 years.
All the polices should mature on maturity date of the first purchase.
The term of the polices purchased during second, third, fourth and fifth policy
years will be 9, 8, 7 and 6 respectively.
New policy can be purchased only if all the previous polices are in force on the
date of purchase of new policy.
Plan Objective :
The pace setter plan with protection to life which gives
Tax benefit under Sec. 80C and Sec. 10(10D)* of Income Tax Act 1961
Investment opportunity with flexibility
Life protection


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Control over your investments
OVERVIEW OF INSURANCE SECTOR
With largest number of life insurance policies in force in the world,
Insurance happens to be a mega opportunity in India. Its a business growing at
the rate of 15-20 per cent annually and presently is of the order of Rs 450
billion. Together with banking services, it adds about 7 per cent to the countrys
GDP. Gross premium collection is nearly 2 per cent of GDP and funds available
with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance
cover while health insurance and non-life insurance continues to be below
international standards. And this part of the population is also subject to weak
social security and pension systems with hardly any old age income security.
This itself is an indicator that growth potential for the insurance sector is
immense.
A well-developed and evolved insurance sector is needed for economic
development as it provides long-term funds for infrastructure development and
at the same time strengthens the risk taking ability. It is estimated that over the
next ten years India would require investments of the order of one trillion US
dollar. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain economic growth of the country.
Insurance is a federal subject in India. There are two legislations that
govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The
insurance sector in India has come a full circle from being an open competitive


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market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360-degree turn
witnessed over a period of almost two centuries.
Indian Insurance Industry: Insurance may be described as a social device to
reduce or eliminate risk of life and property. Under the plan of insurance, a
large number of people associate themselves by sharing risk, attached to
individual.
The risk, which can be insured against include fire, the peril of sea, death,
incident, & burglary. Any risk contingent upon these may be insured against at
a premium commensurate with the risk involved.

Insurance is actually a contract between 2 parties whereby one party
called insurer undertakes in exchange for a fixed sum called premium to pay
the other party happening of a certain event.

Insurance is a contract whereby, in return for the payment of premium by
the insured, the insurers pay the financial losses suffered by the insured as a
result of the occurrence of unforeseen events.

With the help of Insurance, large number of people exposed to a similar
risk make contributions to a common fund out of which the losses suffered by
the unfortunate few, due to accidental events, are made good
Potential Largely untapped market: 17% of the worlds population


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o Nearly 80% of the Indian population is without Life, Health and
Non-life insurance
o Life insurance penetration is low at 4.1% in 2006-07
o Non-life penetration is even lower at 0.6% in 2006-07
o The per capita spend on life and non-life insurance is US$33.2 and
US$5.2 (2006-07), respectively compared to a world average of
US$330 and US$224
o Strong economic growth with increase in affluence and rising risk
awareness leading to rapid growth in the Insurance sector
o Innovative products such as Unit Linked Insurance Policies are
likely to drive future industry growth
o Investment opportunities exist in both Life and Non-life segments
o Total estimated investment opportunity of US$14-15 billion

STRUCTURE
Indian Insurance market was opened to private & foreign investment in 1999-
2000
The Indian Insurance industry consists of a total of 31 players
Life: 1 Public sector player; 15 private players
Non-Life: 6 public sector players; 9 private players
Major international players like AIG, Aviva, MetLife, New York Life,
Prudential, Allianz, Sun Life, Standard Life and Lombard are already
present with minority stakes in joint ventures with Indian companies for
both Life and Non-life segments


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Life Insurance market is still dominated by Life Insurance Corporation
(LIC) - a public sector company which has 75% share of first year
premium in 2006-07
In Non-life, private sector companies (almost all are joint ventures with
foreign insurers) accounted for 34% of the market in 2006 to 07.

POLICY
FDI up to 26% is permitted under the automatic route subject to obtaining a
license from the Insurance Regulatory and Development Authority (IRDA)
Plans to increase FDI up to 49%
Insurance Regulatory Development Authority (IRDA) is the regulator for the
Insurance industry
In a landmark move the government detariffed the General Insurance business
on 1st January 2007
What is Life Insurance?
Life insurance is a guarantee that your family will receive financial
support, even in your absence. Put simply, life insurance provides your family
with a sum of money should something happen to you. It thus permanently
protects your family from financial crises.

In addition to serving as a protective cover, life insurance acts as a
flexible money-saving scheme, which empowers you to accumulate wealth-to
buy a new car, get your children married and even retire comfortably.


34

Life insurance is a contract that pledges payment of an amount to the
person assured (or his nominee) on the happening of the event insured against.

The contract is valid for payment of the insured amount during:
The date of maturity, or
Specified dates at periodic intervals, or
Unfortunate death, if it occurs earlier
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 protection
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.


35
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 premiums
towards a fund and out of which the persons exposed to a particular risk is paid.

Assessment of risk - Insurance determines the probable 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:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt
suitable device to prevent unfortunate consequences of risk by observing safety
instructions; installation of automatic sparkler or alarm systems, 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.


36

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 savings 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 trade - Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under marine
insurance cover.


37
Need for Life Insurance
Today, there is no shortage of investment options for a person to choose
from. Modern day investments include gold, property, fixed income instruments,
mutual funds and of course, life insurance. Given the plethora of choices, it
becomes imperative to make the right choice when investing your hard-earned
money. Life insurance is a unique investment that helps you to meet your dual
needs - saving for life's important goals, and protecting your assets.
LET US LOOK AT THESE UNIQUE BENEFITS OF
LIFE INSURANCE IN DETAIL.
Asset Protection
From an investor's point of view, an investment can play two roles - asset
appreciation or asset protection. While most financial instruments have the
underlying benefit of asset appreciation, life insurance is unique in that it gives
the customer the reassurance of asset protection, along with a strong element of
asset appreciation.
The core benefit of life insurance is that the financial interests of ones
family remain protected from circumstances such as loss of income due to
critical illness or death of the policyholder. Simultaneously, insurance products
also have a strong inbuilt wealth creation proposition. The customer therefore
benefits on two counts and life insurance occupies a unique space in the
landscape of investment options available to a customer.
Goal based savings
Each of us has some goals in life for which we need to save. For a young,
newly married couple, it could be buying a house. Once, they decide to start a


38
family, the goal changes to planning for the education or marriage of their
children. As one grows older, planning for one's retirement will begin to take
precedence.
Clearly, as your life stage and therefore your financial goals change, the
instrument in which you invest should offer corresponding benefits pertinent to
the new life stage.
Life insurance is the only investment option that offers specific products tailor-
made for different life stages. It thus ensures that the benefits offered to the
customer reflect the needs of the customer at that particular life stage, and hence
ensures that the financial goals of that life stage are met.
The table below gives a general guide to the plans that are appropriate for
different life stages.
Life Stage Primary Need
Life Insurance
Product
Young &
Single
Asset creation
Wealth creation
plans
Young &
Just married
Asset creation
& protection
Wealth creation
and mortgage
protection plans
Married
With kids
Children's
education,
Education
insurance,
mortgage


39
Asset creation
and protection
protection &
wealth creation
plans
Middle aged
with grown
up kids
Planning for
retirement &
asset
protection
Retirement
solutions &
mortgage
protection
Across all lif-
stages
Health plans Health Insurance

Insurance Life V/S Other Savings
Contract of Insurance:
A contract of insurance is a contract of utmost good faith technically
known as uberrima fides. The doctrine of disclosing all material facts is
embodied in this important principle, which applies to all forms of insurance.

At the time of taking a policy, policyholder should ensure that all
questions in the proposal form are correctly answered. Any misrepresentation,
non-disclosure or fraud in any document leading to the acceptance of the risk
would render the insurance contract null and void.


40
Protection:
Savings through life insurance guarantee full protection against risk of
death of the saver. Also, in case of demise, life insurance assures payment of the
entire amount assured (with bonuses wherever applicable) whereas in other
savings schemes, only the amount saved (with interest) is payable.

Aid to Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since
payments can be made effortlessly because of the 'easy installment' facility built
into the scheme. (Premium payment for insurance is monthly, quarterly, half
yearly or yearly).

For example: The Salary Saving Scheme popularly known as SSS provides a
convenient method of paying premium each month by deduction from one's
salary.
In this case the employer directly pays the deducted premium to LIC. The Salary
Saving Scheme is ideal for any institution or establishment subject to specified
terms and conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any
policy that has acquired loan value. Besides, a life insurance policy is also
generally accepted as security, even for a commercial loan.

Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and


41
wealth tax. This is available for amounts paid by way of premium for life
insurance subject to income tax rates in force.
Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.

Money When You Need It:
A policy that has a suitable insurance plan or a combination of different
plans can be effectively used to meet certain monetary needs that may arise from
time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's
retirement from service and used for any specific purpose, such as, purchase of a
house or for other investments. Also, loans are granted to policyholders for
house building or for purchase of flats (subject to certain conditions) .

Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid
contract can insure himself/herself and those in whom he/she has insurable
interest.

Policies can also be taken, subject to certain conditions, on the life of
one's spouse or children. While underwriting proposals, certain factors such as


42
the policyholders state of health, the proponent's income and other relevant
factors are considered by the Corporation.

Insurance For Women
Prior to nationalization (1956), many private insurance companies would
offer insurance to female lives with some extra premium or on restrictive
conditions. However, after nationalization of life insurance, the terms under
which life insurance is granted to female lives have been reviewed from time-to-
time.
At present, women who work and earn an income are treated at par with
men. In other cases, a restrictive clause is imposed, only if the age of the female
is up to 30 years and if she does not have an income attracting Income Tax.

Medical And Non-Medical Schemes
Life insurance is normally offered after a medical examination of the life
to be assured. However, to facilitate greater spread of insurance and also to
avoid inconvenience, LIC has been extending insurance cover without any
medical examination, subject to certain conditions.
With Profit And Without Profit Plans
An insurance policy can be 'with' or 'without' profit. In the former,
bonuses disclosed, if any, after periodical valuations are allotted to the policy
and are payable along with the contracted amount.

In 'without' profit plan the contracted amount is paid without any addition.
The premium rate charged for a 'with' profit policy is therefore higher than for a


43
'without' profit policy.

Key man Insurance
Key man insurance is taken by a business firm on the life of key
employee(s) to protect the firm against financial losses, which may occur due to
the premature demise of the Key man
PRINCIPLES OF INSURANCE
Insurance is a specialized type of contract. Apart from the usual essentials
of a valid contract, insurance contracts are subject to some additional principles.
These principles provide the framework within which the product and all the
contracts of insurance operate.

Principle of cooperation: A device to share risk & uncertainties
collectively, one for all and all for one
Principle of probability: Important determinant of insurance premium,
Rate of premium depends on quantum of risk & probability of risk
Principle of Insurable Interest: Interest of such a nature that the
possessor would be financially injured by the occurrence of the event
insured against, `` LA to be more valuable alive then dead
Principle of utmost good faith: The parties to the contract (insurer and
insured) are legally bound to reveal each other all information about the
subject matter, which would influence each others decision.


44
Principal of warranties: A warranty is an undertaking by assured that
some conditions shall be fulfilled, or a certain thing shall be or shall not
be done. A warranty may be Express or Implied
Principle of Cause Proximal: In order to make the Insurer liable for loss,
such loss must have been proximately caused by the Peril insured against.
E.g. ADBR.

These 6 principles are applicable to all the products, both life and Non-
Life. These principles provide the framework within which the products and
all the contracts of Life Insurance operate.


45
HISTORY OF INDIAN INSURANCE INDUSTRY
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.

Tracing the developments in the Indian insurance sector reveals the 360-
degree turn witnessed over a period of almost 190 years.

The business of life insurance in India in its existing form started in India
in the year 1818 with the establishment of the Oriental Life Insurance
Company in Calcutta.

Some of the important milestones in the life insurance business in India
are
1912 - The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.

1928 - The Indian Insurance Companies Act enacted to enable the
government to collect statistical information about both life and non-life
insurance businesses.

1938 - Earlier legislation consolidated and amended to by the Insurance
Act with the objective of protecting the interests of the insuring public.

1956 - 245 Indian and foreign insurers and provident societies taken over


46
by the central government and nationalized. LIC formed by an Act of
Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore
from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to
the Triton Insurance Company Ltd., the first general insurance company
established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907 - The Indian Mercantile Insurance Ltd. set up, the first company to
transact all classes of general insurance business.

1957 - General Insurance Council, a wing of the Insurance Association of
India, frames a code of conduct for ensuring fair conduct and sound business
practices.

1968 - The Insurance Act amended to regulate investments and set
minimum solvency margins and the Tariff Advisory Committee set up.

1972 - The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect from 1st January
1973.

107 insurers amalgamated and grouped into four companies viz. the


47
National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd.
GIC incorporated as a company.
Before insurance sector was opened to the private sector Life Insurance
Corporation (LIC) was the only insurance company in India. After the opening
up of Insurance sector in India there has been a glut of insurance companies in
India. These companies have come up with innovative and flexible insurance
policies to cater to varying needs of the individual. Opening up of the Insurance
sector has also forced the LIC to tighten up its belt and deliver better service. All
in all it has been a bonanza for the consumer.
The life insurance business in India started since 1818. Till 1956, the
insurance business was mixed and decentralized. In 1956, the life insurance
business of all companies was nationalized and a single monolithic
organization, the Life Insurance Corporation of India (LIC), was set up.
The Insurance Regulatory and Development Authority (IRDA) Bill was
passed by Indian parliament in December 1999. The IRDA become a
statutory body in April 2000 and has been framing regulations and
restrictions the private sector insurance companies.
The insurance sector was opened up to the private sector in August 2000.
Consequently, some Indian and foreign private companies have entered the
insurance business. There are about 16 life insurance companies operating in the
private sector in India.
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.


48
Tracing the developments in the Indian insurance sector reveals the 360 degree
turn witnessed over a period of almost two centuries.
ABOUT THE INDUSTRY:
With an annual growth rate of 15-20% and the largest number of life
insurance policies in force, the potential of the Indian insurance industry is huge.
Total value of the Indian insurance market (2004-05) is estimated at Rs. 450
billion (US$10 billion). According to government sources, the insurance and
banking services' contribution to the country's gross domestic product (GDP) is
7% out of which the gross premium collection forms a significant part. The
funds available with the state-owned Life Insurance Corporation (LIC) for
investments are 8% of GDP.

Till date, only 20% of the total insurable population of India is covered
under various life insurance schemes, the penetration rates of health and other
non-life insurances in India is also well below the international level. These
facts indicate the of immense growth potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major
structural changes took place with the ending of government monopoly and the
passage of the Insurance Regulatory and Development Authority (IRDA) Bill,
lifting all entry restrictions for private players and allowing foreign players to
enter the market with some limits on direct foreign ownership.


49
Though, the existing rule says that a foreign partner can hold 26% equity
in an insurance company, a proposal to increase this limit to 49% is pending
with the government. Since opening up of the insurance sector in 1999, foreign
investments of Rs. 8.7 billion have poured into the Indian market and 21 private
companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled
fledgling private insurance companies to sign up Indian customers faster than
anyone expected. Indians, who had always seen life insurance as a tax saving
device, are now suddenly turning to the private sector and snapping up the new
innovative products on offer.
income from new business at Rs. 253.43 billion during the fiscal year 2004-
2005, braving stiff competition from private insurers. This report "Indian
Insurance Industry: New Avenues for Growth 2012", finds that the market share
of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86
billion by selling 2.4 billion new policies in 2004-05. But this was still not
enough to arrest the fall in its market share, as private players grew by 129% to
mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04

Though the total volume of LIC's business increased in the last fiscal year
(2004-2005) compared to the previous one, its market share came down from
87.04 to 78.07%. The 14 private insurers increased their market share from
about 13% to about 22% in a year's time. The figures for the first two months of
the fiscal year 2005-06 also speak of the growing share of the private insurers.


50
The share of LIC for this period has further come down to 75 percent, while the
private players have grabbed over 24 percent.

There are presently 12 general insurance companies with four public
sector companies and eight private insurers. According to estimates, private
insurance companies collectively have a 10% share of the non-life insurance
market.


51
Indian Insurance Industry Forecast (2011-2012)
The market research report Indian Insurance Industry Forecast (2011-
2012) gives an in-depth analysis of the present and future of the Indian
Insurance Industry. The market research report looks in to the details as well as
gives an overview of the Indian insurance market with focus on the performance
of the key players.

With the initiation of the deregulation in the Indian insurance market, the
monopoly of big public sector companies in life insurance as well as general
(non-life insurance) market has been broken. New private players have entered
the market and with their innovative approaches and better use of distribution
channels and technology, they are eating in to the shares of established public
sector companies in Indian Insurance Market.
Since the deregulations have been put in to place, the market share of LIC
has come down to 71.4% in life insurance market while the private players have
captured around 17% market in the general insurance segment. It is said that,
public sector insurance companies such as LIC and New India Assurance are
registered impressive double-digit growths, which reflects on the overall health
of the Indian insurance sector.


52
Indian Insurance Sector
The Insurance sector in India governed by Insurance Act, 1938, the Life
Insurance Corporation Act, 1956 and General Insurance Business
(Nationalization) Act, 1972, Insurance Regulatory and Development Authority
(IRDA) Act, 1999 and other related Acts.

Life Insurance Corporation of India (LIC):
Life Insurance Corporation of India (LIC) was formed in September, 1956
by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital
contribution from the Government of India. Then the Finance Minister, Shri
C.D. Deshmukh, while piloting the bill, outlined the objectives of LIC thus: to
conduct the business with the utmost economy, in a spirit of trusteeship; to
charge premium no higher than warranted by strict actuarial considerations; to
invest the funds for obtaining maximum yield for the policy holders consistent
with safety of the capital; to render prompt and efficient service to policy
holders, thereby making insurance widely popular.
Since nationalization, LIC has built up a vast network of 2,048 branches,
100 divisions and 7 zonal offices spread over the country. The Life Insurance
Corporation of India 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 Limited, Nairobi;
United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance
Corporation (International) E.C. Bahrain. The Corporation has registered a joint


53
venture company in 26th December, 2000 in Kathmandu, Nepal by the name of
Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group
Limited, a local industrial Group. An off-shore company L.I.C. (Mauritius) Off-
shore Limited has also been set up in 2001 to tap the African insurance market.


54
General Insurance:
General insurance business in the country was nationalized with effect
from 1st January 1973 by the General Insurance Business (Nationalization) Act,
1972. More than 100 non-life insurance companies including branches of
foreign companies operating within the country were amalgamated and grouped
into four companies, viz., the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd., and the United
India Insurance Company Ltd. with head offices at Calcutta, Bombay, New
Delhi and Madras, respectively. General Insurance Corporation (GIC) which
was the holding company of the four public sector general insurance companies
has since been de-linked from the later and has been approved as the "Indian
Reinsure" since 3rd November 2000. The share capital of GIC and that of the
four companies are held by the Government of India. All the five entities are
Government companies registered under the Companies Act.
The general insurance business has grown in spread and volume after
nationalization. The four companies have 2699 branch offices, 1360 divisional
offices and 92 regional offices spread all over the country. GIC and its
subsidiaries have representation either directly through branches or agencies in
16 countries and through associate/ locally incorporated subsidiary companies in
14 other countries. A wholly- owned subsidiary company of GIC, i.e. Indian
International Pvt Ltd. is operating in Singapore and there is a joint venture
company, viz. Ken India Assurance Ltd. in Kenya. A new wholly owned
subsidiary called New India International Ltd., UK has also been registered.


55
Insurance sector reforms
In 1993, Malhotra Committee, headed by former Finance Secretary and
RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance
industry and recommend its future direction. The Malhotra committee was set
up with the objective of complementing the reforms initiated in the financial
sector. The reforms were aimed at creating a more efficient and competitive
financial system suitable for the requirements of the economy keeping in mind
the structural changes currently underway and recognizing that insurance is an
important part of the overall financial system where it was necessary to address
the need for similar reforms.In 1994, the committee submitted the report and
some of the key recommendations included:

i) Structure:
Government stake in the insurance Companies to be brought down to 50%
Government should take over the holdings of GIC and its subsidiaries so that
these subsidiaries can act as independent corporations. All the insurance
companies should be given greater freedom to operate
ii) Competition:
Private Companies with a minimum paid up capital of Rs.1bn should be
allowed to enter the industry
No Company should deal in both Life and General Insurance through a
single Entity. Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies. Postal Life Insurance should be


56
allowed to operate in the rural market. Only one State Level Life Insurance
Company should be allowed to operate in each state.
iii) Regulatory Body:
The Insurance Act should be changed. An Insurance Regulatory body
should be set up. Controller of Insurance (Currently a part from the Finance
Ministry) should be made independent.
iv) Investments:
Mandatory Investments of LIC Life Fund in government securities to be
reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than
5% in any company (There current holdings to be brought down to this level
over a period of time)

v) Customer Service
LIC should pay interest on delays in payments beyond 30 days. Insurance
companies must be encouraged to set up unit linked pension plans.
Computerization of operations and updating of technology to be carried out in
the insurance industry. The committee emphasized that in order to improve the
customer services and increase the coverage of the insurance industry should be
opened up to competition. But at the same time, the committee felt the need to
exercise caution as any failure on the part of new players could ruin the public
confidence in the industry.


57
Hence, it was decided to allow competition in a limited way by stipulating
the minimum capital requirement of Rs.100 crore. The committee felt the need
to provide greater autonomy to insurance companies in order to improve their
performance and enable them to act as independent companies with economic
motives. For this purpose, it had proposed setting up an independent regulatory
body.

The Insurance Regulatory and Development Authority
Reforms in the Insurance sector were initiated with the passage of the
IRDA Bill in Parliament in December 1999. The IRDA since its incorporation
as a statutory body in April 2000 has fastidiously stuck to its schedule of
framing regulations and registering the private sector insurance companies.
The other decisions taken simultaneously to provide the supporting
systems to the insurance sector and in particular the life insurance companies
were the launch of the IRDAs online service for issue and renewal of licenses
to agents. The approval of institutions for imparting training to agents has also
ensured that the insurance companies would have a trained workforce of
insurance agents in place to sell their products, which are expected to be
introduced by early next year.
Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. In the private sector 12 life
insurance and 6 general insurance companies have been registered.
Duties, Powers and Functions of IRDA


58
Section 14 IRDA Act, 1999 lays down the duties, powers and functions of
IRDA
1. The Authority has the duty to regulate, promote and ensure orderly
growth of the Insurance business and reinsurance business.
2. This Include -
a) Issue to the applicant a certificate of registration, renew, modify,
Withdraw, suspend or cancel such registration
b) Protection of interests of the policy holders in matter concerning
assigning Of policy, nomination by policyholders, insurable interest,
settlement of insurance claim, surrender value of policy and condition of
contracts of insurance.
c) Specifying the 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 organization connected with
insurance and reinsurance business.
g) Levying fees and other charges for carrying out the purposes of this act.
h) Calling from information from, undertaking inspection of, conducting
enquiries and investigation including audit of the insurers, intermediaries
and other organization connected with the insurance business
i) Control and regulation of the rates, advantages, terms and condition


59
j) Specifying the form and manner in which books of accounts shall be
maintained and statement of account shall be rendered by insurers and
other 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 % of Premium, Income of the insurer to finance schemes
for promoting and regulating professional organizations
Specifying the % of Life Insurance Business and general Insurance
Business to be undertaken by the Insurer in the rural or social sector

Insurers
Insurance industry, as on 1.4.2000, comprised mainly two players: the
state insurers
Life Insurers
Life Insurance Corporation of India (LIC)
General Insurers
General Insurance Corporation of India (GIC) (with effect from
Dec'2000, a National Reinsure)
GIC had four subsidiary companies, namely:


60
1. The Oriental Insurance Company Limited
2. The New India Assurance Company Limited,
3. National Insurance Company Limited
4. United India Insurance Company Limited.

With effect from Dec'2000, these subsidiaries have been de-linked from the
parent company and made as independent insurance companies.

Yr:2000-2001: (From 2nd April '2000 to 31st December'2001)
In the year 2000-2001, Insurance industry had 16 new entrants(private), namely

Life Insurance: Major Players
Name of Company
Public Sector
LIFE INSURANCE CORPORATION
Private Sector
ICICI Prudential
Bajaj Allianz


61
Birla Sun Life
HDFC Standard Life
Tata AIG
Private Sector
ICICI Lombard
Bajaj Allianz
IFFCO Tokio
Tata AIG


62
IMPACT OF FOREIGN INSURERS ENTERING INDIA:
''LIBERALIZATION''
For a long period after Independence, Indian business was characterized
by government regulations-- the license raj. The government not only
exercised control over industrial growth and expansion, but also ran monopoly
undertakings and took over loss-making industries on the grounds of
mismanagement. Then, in 1985, the late Mr Rajiv Gandhi initiated the first set
of economic reforms. After so many years of developmental effort they had not
been able to eradicate poverty, remove inequalities or establish an egalitarian
society. The resultant disillusionment came out in the open when the socialist
economies collapsed. As the Indian economy got further integrated with the
worlds, the necessity for globalization increased. This introduced a new
buzzword--Liberalization.
The term is used for a more outward-oriented policy, which includes the
elimination of anti-export biases, lowering high import tariffs, reducing and
phasing out Quantitative Restrictions (QRs) on inputs and switching to tariff-
related measures. However, the government would not completely abandon all
forms of control and place the entire economy at the mercy of MNCs.
Liberalization and globalization would mainly remove certain imbalances and
restrictions that hamper the free flow of trade. The goals of liberalization were to
motivate Indian manufacturers to prefer updated technology and to deliver the
better products at lower costs. This would increase competition and provide
incentives to deliver world-class goods and services at affordable prices, which
leads to quality assurance.


63
Marketing and Distribution Strategies followed
By
Reliance life Insurance

DISTRIBUTION CHANNEL
Reliance Life Insurance Company Limited is using five types of
distribution channel, which are as follows:
1) Agency: -
Independent insurance agents represent a number of companies and can research
these companies products to find the right combinationfor their clients.
Independent agents & insurance producer groups are growing in prevalence.
Although producer groups are in their infancy, their emergence may potentially
be realignment in the distribution of financial services. Independent shops
realized that by pooling production and funding a central support office, they
had increased buying power. The one type of distribution channel, which
Reliance Life Insurance Co. Ltd is using, is an agency. This channel works as
follows:


64
Branch
Managers
Advisors
Customers
2) Bank Assurance: -
While a lot of bank relationships with insurance companies have been
established, life insurance sales have been slower than one would expect he
primary bank insurance activities have been the distribution of annuities, credit
life, and direct marketing insurance.
Banks are failing to incorporate successful sales tactics used to sell other
financial services like investments. Another type of distribution channel is bank
assurance. This channel is tie up with banks. In this channel the advisors using
or targeting the bank customers to make a business with them i.e., to sell the
policy of the company.
3) Corporate:-
To gain a better understanding of the demand amongst independent advisors for
trust services and to gain a better feel for how independent advisors handle trust


65
services, a research was performed with independent advisors across several
broker/dealers and custodians.
The interviews revealed that demand is greatest for living trusts among
independent advisors, followed by demand for corporate trustee services.
Another type of distribution channel is corporate, which are for employee
benefits. This channel is tie up with corporate or small enterprises. Through
these small enterprises, the advisors will sell the products/policy to customers of
the small enterprises.
4) Rural Benefits:-
Brokerage firms have gained much of the institutional and personal trust
business lost by the banks. These firms have steadily captured assets, primarily
at the expense of the banks. The number of non-bank trust companies has
increased in recent years as independent trust companies have emerged and
more broker/dealers are integrated services. Insurance companies view full-
service brokers as a potentially new distribution channel as well. Another type
of distribution channel is rural benefits. This
channel works as a dealership. In this channel, the dealers will sell the policy to
the target customers.


66
5) Web World:-
Direct sales of life insurance are growing rapidly, but many of the traditional
full-serve players seem to be letting it go. Across all financial services,
consumers are expressing a willingness to deal with a variety of providers on the
web. Web sites are starting to pop up offering consumer insurance products
especially designed for distribution over the web.
Another type of distribution channel is web world. This channel is tie up with
customer database. In this channel, the advisors will sell the policy to the target
customers, which are taken from the customer database, are listed in the website.
Promotional programmes and target segment are related to each other.
The promotional programmes are made to motivate the advisors/agents and sales
managers to do more business i.e., to sell the more policies. The Reliance Life
Insurance Co. Ltd has made three promotional schemes, which are as follows:
1) Shubh Arambh:-
This promotional scheme is detailed as follows: SLAB (WRP) REWARD
ACHIEVERS
30,000 Reliance Life T-Shirt


67
50,000 Table Top Clock
75,000 Leather Bag
1,00,000 World Space Radio
1,50,000 L.G. Microwave- 19L
2,00,000 DVD/VCD/MP3 Player
3,00,000 Sony Music System
SUPER ACHIEVERS
5,00,000 LG Refrigerators GL-233
7,50,000 LG Air Conditioner 1T
10,00,000 Sony Digital Camcorder
15,00,000 Trip to Dubai 3D/4N
20,00,000 Hero Honda Splender
STAR ACHIEVERS
50,00,000 Maruti Alto Std.
75,00,000 Maruti Swift Lxi


68
1,00,00,000 GM Aveo 1.4LS
Login: 1st April to 31st May 06
Issuance till 15th June 06
2) R.A.R.E.:-
The full form of R.A.R.E. is Reliance Advisors Reward Experience. This
programs consists of
1. New Advisor Incentive Program
2. Board of Advisors
3. Annual Discovery Series
4. Advisor Career Progression
5. RARE Club Loyalty Program
The above programs are described as follows
1. R.A.R.E. Program New Advisor Incentives:-
Criteria
There will be two levels in the New Advisor Incentive program


69
A. Launch Pad
B. Take Off
2. R.A.R.E. Program Board of Advisors:-
Criteria
There will be two levels in the Board of Advisors program
A. Time Period
B. Parameters
3. R.A.R.E. Program Discovery Series:-
Criteria
There will be six levels in the Discovery Series program
A. Qualification period
B. Business criteria
C. The qualification criteria will be the same for both the Global and the
National Discovery Series
D. Qualification for the Global Discovery Series


70
E. Qualification for the National Discovery Series
F. The top 150 will bb calculated based on WRP (Weighted Recd Premium)
4. R.A.R.E. Program Advisor Career Progression:-
Advisor Career Progression
A. Business Associate
B. Sales Manager
5. R.A.R.E. Privilege Club:-
Levels
A. The RARE Club will have 6 different levels
B. The criteria for entry into each level will be based on
I. Business (WRP)
II. Persistency
III. Product Mix
C. The qualification period is
I. Logins from 1st Apr 06 to 31st Mar 07


71
II. Issuances from 1st Apr 06 to 15th Apr 07
Qualification Criteria
Level WRP (Rs) Traditional
Products
Persistency
Topaz 1,50,000 60% 80%
Pearl 5,00,000 60% 80%
Sapphire 10,00,000 60% 80%
Emerald 15,00,000 50% 85%
Ruby 25,00,000 50% 85%
Diamond 50,00,000 50% 85%
3) Elite Club Scheme:-
In this scheme the advisor, who have login the regular premium of Rs. 2, 00,000
will be eligible for the Elite Club Membership.


72

Changing customer behavior in insurance buying
In insurance buying, most customers would probably describe their level
of understanding of insurance contracts in the above manner. Customers know
generally what a policy covers; they also know that there are several fine prints
in insurance contracts, which they do not know, or perhaps care to know, at the
time of buying. And they also seem to generally conclude that when it comes to
making a claim under an insurance policy, there could be several issues of which
they are just unaware at the time of buying the policy in the first place.
Changing expectations
A remarkable trend in the insurance industry in the last three years is the
rapid change in the knowledge level as well as expectations of the customers. A
study conducted last year by Forte, a collaborative effort between FICCI and
ING Vysya Insurance Co. about the consumer behavior in the pre and post
liberalization days of the industry had revealed stunning changes in consumer
expectations.
It looks as though the docile, uninformed, insurance consumer has
suddenly been transformed into an aggressive and highly demanding species.
While the fresh air of competition in every sector of the economy brings in
major changes in consumer expectations (witness the sea change in the attitude
of automobile buyers in India in the last five years), the insurance industry has
witnessed a few unique aspects, such as regulation-inspired efforts to educate


73
insurance buyers, and a vast change in the skills and capabilities of the
intermediaries involved in distribution.
Motivating factors
In respect of life insurance, potential buyers are driven to buying a policy
for one or more of three major reasons: security of the money invested, saving
for one or more specific purposes, and the availability of tax benefit. Customers
are increasingly known to place less reliance on the tax benefit factor, and stress
more on the security aspect and the end-use objective. The challenge of the
insurance companies is to address the motivating factors imaginatively and
come up with genuine solutions. Take for example, the consumers objective of
taking a policy to save money for higher education of a child. This has been a
driving force in the sale of new insurance contracts in several other countries
too, notably in Asia.
A potential buyer primarily expects that the saving should be a painless
process and that the money saved should be absolutely safe. The challenge is to
provide not only convenient payment options, but also mechanisms that could
offer some measure of protection and relief to the customer if he is forced to
disrupt the payment arrangement for unforeseen reasons.
On the issue of the consumers perception of security of the money
invested, there are two important aspects. One is how the features of the
insurance contract are put across to the buyer (whether it is a unit-linked policy
or endowment oriented).


74
The second is how to address more effectively the question about the
dependability of the new generation companies that potential new insurance
buyers raise during sales calls especially outside metros and in small towns
(referred to in publicity jargon as buyers in the SEC B and C categories). Both
insurance companies and the Regulator need to address this behavioral challenge
more actively.
Consumers experience
There has been a vast change in the approach of the insurance agent from
the pre-liberalization days. While the agent in the past established informal
contacts with potential buyers and often depended on referrals from friends and
family members, the new age companies insist on a professional, and often
aggressive stance on the part of the sales staff. Customer expectations in this
regard revolve around two key aspects: first, whether the customer is getting
truthful advice from the agent, or if he is pushing a product that yields him the
highest commission rate. Invariably, the customers today expect the insurance
agent (and other intermediaries such as the banc assurance sales staff) to provide
a ready comparison of competitors products and how the product the agent is
suggesting is superior to the others. How far is the need-based analysis of
insurance requirement, that the new age sales staff are trained to offer, found to
be relevant and useful to potential insurance buyers? The answer varies from the
metro cities and small towns. However outside metro cities, customers tend to
take a clear view that saving-oriented policies are more needed. There is also
marked reluctance to disclose the true personal financial status and the
corresponding insurance needs to insurance salespersons.


75
The second aspect of customers perception about the new generation of
insurance agents is the level of continuing commitment of the agent to arrange
post-sale service. Potential insurance buyers are unsure that they would continue
to deal with the same agent who sold the policy throughout the term.
They would tend to place more reliance on the companys general
promises of service and commitment. This is an important message for the
insurance companies. As insurance customers increasingly make arrangements
to pay periodical premiums directly through the electronic medium, or though
automatic transfers from their bank accounts, thereby bypassing the need for
regular post-sale service by the agents, customers would tend to place more
reliance on the direct standard of service from the company concerned. Instances
of customers requiring agents to arrange for loans against their policies, or
change nominations etc. are rare. Therefore companies need to gear themselves
to provide high service standards directly.
Premium shopping
Is pricing or the premium rate for a policy, a deciding factor for buying
insurance? It is indeed so in a price sensitive market such as ours. In several
forums, customers have voiced the general feeling that as insurance products
become more complex, and they get bundled with several riders, it is becoming
impossible to make price comparisons between different companies.
An increasingly larger segment of customers now questions why the
premium rate should be the same for a policy if bought direct from the company
over Internet, or through a channel considered simpler, such as the banc


76
assurance channel. There is logic in the insurance companies passing on the cost
saving to customers in such cases.
It is time the Regulator seriously considered the customer expectations of
differential premium rates for the same policy bought through different channels
and allowed the practice. It should therefore be conceivable to offer premium
rebate to insurance buyers who consciously decide to approach the company
directly for buying a policy (after presumably taking the trouble of educating
themselves about the product features and other aspects), and choose to deal
with the company directly for future servicing needs.
High expectations
One aspect of customer service from new age insurance companies that a
remains to be tested widely is the claim payment record. While consumers seem
to be satisfied that the survival benefits under a life insurance policy would get
paid rather promptly from the tech-savvy new companies, obviating the need for
interlocution by the insurance agent, insurance buyers are not yet convinced
about hassle-free payment in the event of a claim, whether under a life policy or
a general insurance policy. This is especially so in respect of rider benefits such
as critical illness or hospitalization benefits.
The level of consumer skepticism on claim payment is markedly high in
respect of non-life insurance products, such as Householders Package or
Medicaid policies. There is considerable work to be done to boost the level of
confidence both by insurance companies and the Regulator. By the time a
company completes the development of a strategy and makes investments to


77
pursue the strategy, the opportunity often ceases to exist. It is therefore
important that the new age insurance companies become kinetic enterprises,
which can take advantage of unpredictable customer demands and unexpected
market events immediately. This is vastly relevant for the Indian market where
the insurance consumers are rapidly coming of age.


78
RESEARCH METHODOLOGY
The research based will be Descriptive Research.
Type of data
1.Primary data
2.Secondary data
Primary data
The primary or the first hand data will be collected with the help of handing out
the questionnaire to the customers &employees.
Secondary data
The major source of secondary or supporting data will be internet .
Using this data measurement technique, information was collected by personal
interviews.
Secondary data was collected through company websites, discussions with
company guide.
The collected data was processed through S.P.S.S. Package.
Sampling Design

The research was mainly opted on customers survey, advisers survey as
well as sales officers survey.


79
The sample selected for survey was stratified sample. Sample size is 50
Customers, 10 Sales officers and 50 advisers.
Sample Character

Respondents are sales officers, and existing customers of reliance
insurance and the advisers. .
Sampling Plan
For Customers
Sampling unit : Individuals.
Sampling Method : Non Probability, Convenience Sampling.
Sampling Size : 50 Customers.
For sales officers
Sampling unit : 10 Sales officers
For Advisers
Sampling unit : Advisors .
Sampling Method : Non Probability, Convenience Sampling
Sampling Size : 50 Advisers.
Sampling Plan : Questionnaires.
Sample Area : KOPPAL


80
Tools and Technique of Data Collection
Personal Interviews
Where customers, sales officers and advisers were interviewed personally
that face to face interaction were done.

Questionnaire:
It is a systematic designed questionnaire is used for collecting primary
data. These data are used for further descriptive research.


81
Table 1: Do you agree that reliance insurance variety of products.

Figure: 1 Do you agree that reliance insurance variety of products
6. 0%
34.0%
60.0%
normal
agree
st rongly agree

Findings
From the 50 respondents surveyed
60% Customers are strongly agreed that Reliance have variety of products.
34% Customers are agree that reliance has variety of products.
6% Customers feel that Reliance has Neutral of products.
30 60.0 60.0 60.0
17 34.0 34.0 94.0
3 6.0 6.0 100.0
50 100.0 100.0
strongly agree
agree
normal
Total
Frequency Percent Valid Percent
Cumulative
Percent


82

Table No: 2. Did you get sufficient information about the product while
purchasing

Figure: 2. Did you get sufficient information about the product while
purchasing

Findings
74% respondents say that they got sufficient information about product while
purchasing.
37 74.0 74.0 74.0
13 26.0 26.0 100.0
50 100.0 100.0
yes
no
Total
Frequency Percent Val id Percent
Cumul ati ve
Percent
26. 0%
74. 0%
no
yes


83
26% respondents say that they did not got sufficient information about
product while purchasing
Table: 3. If no the Reasons are

Figure: 3. If no the Reasons are

Findings
24% respondents say that because complexity of the product
12 24.0 57.1 57.1
9 18.0 42.9 100.0
21 42.0 100.0
complexity of products
less inf ormation given
by advisor/sales of f icer
Total
Frequenc
y Percent Valid Percent
Cumulative
Percent
18.0%
24.0%
58.0%
less informat ion giv
complexity of produc
Missing


84
18% respondents say that less information given
Table: 4. Does your need and product are matching

Figure: 4 Does your need and product are matching

Findings
54% respondents say that, their need and product fully matched
40% respondents say that, their need and product partly matched
27 54.0 54.0 54.0
20 40.0 40.0 94.0
3 6.0 6.0 100.0
50 100.0 100.0
f ully matched
partly matched
normal
Total
Cumulative
Percent
6.0%
40.0%
54.0%
normal
part ly mat ched
fully matched


85
6% respondents say that their need and product are neutral
Table: 5.

Figure: 5. cross tabs

Out of the total sample most of the customer are highly motivated by the sales
officer

how much are you motivated by advisor ?(advisor) * how much are you
motivated by sales officer?(sales officer)) Cr osstabulation
Count
15 4 19
19 6 25
3 3 6
37 13 50
highly motivated
motivated
not at all
how much are you
motivated by advisor
?(advisor)
Total
highly
motivated motivated
how much are you
motivated by sales
of f icer?(sales of ficer))
Total
how much are y ou motiv ated by advisor ?(advisor)
not at all motivated highly motivated
C
o
u
n
t
20
10
0
how much are y ou mot
highly motivated
motivated
3
6
4
3
19
15


86
Table 6: Which are the services you receive from the advisor

Figure: 6. Which are the services you receive from the advisor

Findings
54% respondents say that they got information about the premium
34% respondents say that their need and product partly matched
12% respondents say that their need and product are neutral
27 54.0 54.0 54.0
17 34.0 34.0 88.0
6 12.0 12.0 100.0
50 100.0 100.0
inf ormation of premium
date reminding
inf ormation of new
policies
help in solving the doubts
Total
Cumulative
Percent
12.0%
34.0%
54.0%
help in solving the
information of new p
information of premi


87
Table: 7. Have you tried to understand needs of the customers

Figure: 7. Have you tried to understand needs of the customers

Findings
62% Advisor say that they tried to understand needs of the customers
38% advisor say that they dont try to understand needs of the customers
Table: 8. How many times you have contacted the existing customer
31 62.0 62.0 62.0
19 38.0 38.0 100.0
50 100.0 100.0
yes
no
Total
Cumul ati ve
Percent
38. 0%
62. 0%
no
yes


88

Figure: 8. How many times you have contacted the existing customer

Findings
36% Advisor say that they have contacted the customers once in 6 months
30% advisor says that they try to contact once in a month to customer
20% Advisor say that they have contacted once in a year to customers
14% advisor says that they have contacted customers once in a week.
7 14.0 14.0 14.0
15 30.0 30.0 44.0
18 36.0 36.0 80.0
10 20.0 20.0 100.0
50 100.0 100.0
once in week
once in month
once in 6 months
once in a year
Total
Cumulative
Percent
20.0%
36.0%
30.0%
14.0%
once in a year
once in 6 months
once in month
once in week


89
Table: 9. Do you prepare yourself for any sales call

Figure: 9. Do you prepare yourself for any sales call

Findings
58% Advisor says that they prepare for sales call
42% advisor says that they dont prepare for sales call

29 58.0 58.0 58.0
21 42.0 42.0 100.0
50 100.0 100.0
yes
no
Total
Cumul ati ve
Percent
42.0%
58.0%
no
yes


90
Table: 10 What kind of assistance do you need to generate more
business

Figure: 10.What kind of assistance do you need to generate more
business

Findings
52% Advisor says that they want training about customer handling
26 52.0 52.0 52.0
16 32.0 32.0 84.0
8 16.0 16.0 100.0
50 100.0 100.0
Training about
customer handling
Helpdesk at the branch
Generating leads by
the company
Total
Cumulative
Percent
16. 0%
32. 0%
52. 0%
Generating leads by
Helpdesk at the bran
Training about custo


91
32% advisor says that they want help desk at the branch
16% advisor says that they want generating leads by the company

Table: 11. Extent of advisor satisfaction in RIL with Monetary

Figure: 11. Extent of advisor satisfaction in RLIC with Monetary

Findings
70% of the advisors are highly satisfied with monetary benefits, and
30% of the advisors are satisfied with monetary bene

7 70.0 70.0 70.0
3 30.0 30.0 100.0
10 100.0 100.0
H.sati sfied
sati sfi ed
Total
Cumul ati ve
Percent
30.0%
70.0%
satisfied
H.satisfied


92
Table: 12. Extent of advisor satisfaction in RIL with rewards

Figure: 12 Extent of advisor satisfaction in RIL with rewards

Findings
30% of the advisors are highly satisfied with the rewards.
50% of the advisors are satisfied with the rewards, and
20% of the advisors are feeling normal about the Rewards
3 30.0 30.0 30.0
5 50.0 50.0 80.0
2 20.0 20.0 100.0
10 100.0 100.0
H.satisf ied
satisf ied
neutral
Total
Cumulative
Percent
20.0%
50.0%
30.0%
neutral
satisfied
H.satisfied


93
Table: 13. Extent of advisor satisfaction in RIL with recognition

Figure: 13. Extent of advisor satisfaction in RIL with recognition

Findings
40% of the advisors are highly satisfied with the recognition
40% of the advisors are satisfied with the recognition.
20% advisors are feeling normal about the recognition.

4 40.0 40.0 40.0
4 40.0 40.0 80.0
2 20.0 20.0 100.0
10 100.0 100.0
H.satisf ied
satisf ied
neutral
Total
Cumulative
Percent
20.0%
40.0%
40.0%
neutral
satisfied
H.satisfied


94
Table: 14 Do you find difficulty in handling advisers

Figure: 14 Do you find difficulty in handling advisers

Findings
The sales officer found about 60% difficulty in handling the advisor
The sales officer found about 40% No difficulty in handling the advisor

6 60.0 60.0 60.0
4 40.0 40.0 100.0
10 100.0 100.0
yes
NO
Total
Cumul ati ve
Percent
40.0%
60.0%
NO
yes


95
Table: 15. What kind of assistance do you need to generate more business

Figure: 15. What kind of assistance do you need to generate more business

Findings
50% sales officers feel that generating business can be done through meeting
with advisor
50% sales officers feel that generating business can be done through help desk at
the branch 20% sales officers feel that managers can do generating business
through briefing 10% sales officers feel that managers can do generating
business through presentation
1 10.0 10.0 10.0
2 20.0 20.0 30.0
2 20.0 20.0 50.0
5 50.0 50.0 100.0
10 100.0 100.0
presentation by the
insurance comapny
brief ing by managers
helpdesk at the branch
meeting with advisers
Total
Cumulative
Percent
50.0%
20.0%
20.0%
10.0%
meeting with advi ser
helpdeskat the bran
bri efing by managers
presentation by the


96
F FI IN ND DI IN NG GS S
1 1. . Even though the sales officers and advisors provide sufficient information to
customers, while selling the product 26% of the total customers feel that they
had not received sufficient information. Provided was complex, rest of the
respondents feel that the information provided was less.
2 2. . Found that Reliance Life Insurance has large variety of products in its
portfolio, it is observed that 37% of the customer feel that the product purchased
by most the customer and their need are not matching.
3. As compared to the Advisors, Sales people perform more than advisors. In
instance sales people have motivated the most of the customers to purchase the
product.
4. The male were the dominating category in advisors
5. Due to lack of the effective training, most of the advisors were not able to
handle the customer properly, and may not solve the customers queries.
6. There are not satisfactory visits made by the advisors to the customers
doorstep. Only 14% of the advisors have been visiting the customer at their
doorstep at once a week. So that they can find the need in the existing customers
or can be able to build a new customer for the Reliance Life Insurance
7. Most of the advisors do not prepare themselves for the sales call; in turn they
may not perform better at the call of the customer.
8. To generate more business, most the Sales officers feel that there should be a
meeting to be kept with the advisors.


97
9. The services provided by advisor to the customer are most of about 54% of
the customer receive information of premium date reminding, while 34%
receive information of new policies and 12% of customer get service of solving
the doubts.
10. 62% of the advisors have tried to understand the customers needs, which in-
turn will help in suggesting a suitable product to the customer. But 38% of the
advisors havent tried in understanding the customer needs.
11. About 32% of the advisors feel that the company should provide help desk at
the branch. And 16% of the advisors feel generating leads by the company is
necessary for generating more business.
12. 70% of the advisors are highly satisfied with monetary benefits, and only
30% of the advisors are satisfied with monetary benefits.
13. 30% of the advisors are highly satisfied with the rewards. 50% of the
advisors are satisfied with the rewards, and 20% advisor are feeling normal
about the Rewards

14.40% of the advisors are highly satisfied with the recognition, about 40% of
the advisors are satisfied with the recognition, and 20% advisor are feeling
normal about the recognition.

15. The advisors who are working with the Reliance Life Insurance fall under
the age group between, 25 to 30 Years. Most of the advisors are young.


98
Limitations of the study

The present study is undertaken in Agra city and data is collected from
the respondents for the year 2010-11. Hence, data pertained to the study is too
short and brief for generalization. Hence, it would be difficult to draw precise
generalizations regarding the implications of the study. The findings in the
study, interpretations and conclusions drawn could be best seen within these
limitations.

EXPECTED CONTRIBUTION FROM THE STUDY

As the number of visits made by the advisors to the customers is less than
56%, and the relation can be build/maintained by effective
communication with the customers by being in constant touch with the
customer. As many of the new life insurance companies are entering,
Reliance has to maintain its relation with the customer. So that it can be
abele to generate more number of loyal customers.

To educate the customers about the new products, the company can use
SMS service for reaching its customers. Due to large number of
customers, the reach of the entire customers in less time may not be
possible from its advisors and sales officers. This can be a less costly


99
medium of taking direct response of the customers. As it does not disturb
the customer.

To effective closing of any sales call, one should understand the need of
the customers in depth. The Advisors can be trained by the sales officers,
and training institution.

The Reliance should come up with more number of Products for those
customers about 40% of customer are feeling that the product that they
purchased. does not match there needs

This research has been brought up many facts regarding the Customer
relationship Management. Reliance Life insurance has large number of products
in its portfolio. But the advisors are unable to find out the need of the customers
and they are unable to suggest the right suitable product. By this project, now I
can understand the various factors of insurance industry and how the customer
relation is maintained in this industry. The potential customers are more in
number and they are still not secured their life. Due to distribution channels, to
reach every other customer in shortest time is not possible; hence company can
adopt some of the suggestions


100
Questionnaire For Customers

1. Name:
2. Age:
3. Sex:
4. Income:

5. Do you agree that Reliance life insurance offers variety of products?
Strongly Agree Agree Normal Disagree Strongly
Disagree

6. Did you got sufficient information about products while purchasing?
a) Yes b) No
7. If No, the reasons are:
Complexity of products
Less information given by the adviser/sales officer
Any others (specify)


101
8. Does your need and the product you purchased are matching?
Fully matched Partly matched Normal Partly not matched Not matched

9. How much are you motivated by the adviser or sales officer?
Highly motivated Highly
motivated

Adviser motivated Sales Officer motivated

Not at all Not at all
10.Which are the services you receive from the advisor?
Information of premium date reminding
Information of new policies.
Helps in solving the doubts.
If any mention __________________________


102

11. Suggest any unique service you want from the organization?
__________________________
Thank You

QUESTIONNAIRE FOR SALES OFFICERS

1. Name:
2. Designation:
3. Do you agree that Reliance life insurance has variety of products?
Yes No
4. Do you educate the advisers about initiating Reliance products?
Yes No
5. If No, the reasons are:
Lack of information about the same,
Lack of time
Lack of motivation from Reliance Life Insurance
Lack of interest in the Advisers,


103
6. Are you aware of the various incentives available for following leads given by
advisers?
Yes No
7. What are the advisors satisfied with?
H Satisfied Satisfied Neutral Dissatisfied H
Dissatisfied
Monetary
Rewards
Recognition

8. How many advisers are there in youre under?
_______
9. Do you find difficulty in handling advisers?
Yes No

10. If yes then what type of difficulty you face?
_____________
11. Are you given sufficient information / training to help you clear the advisers
queries regarding insurance plans?


104
Yes No

12. What kind of assistance do you need to generate more business?
Presentation by the insurance company
Briefing by managers
Helpdesk at the branch
Meeting with advisers

Thank You
QUESTIONNAIRE FOR ADVISERS

1. Name:
2. Age:
3. Sex:
4. Qualification:
5. Do you agree that Reliance life insurance has variety of products?
Strongly Agree Agree Normal Disagree Strongly
Disagree


105
6. Do you get sufficient information about products?
Yes No
If No, the reasons are:
Lack of interest in yourself
Lack of Training
Lack of motivation from Reliance Life Insurance
7. Do you educate customers about Reliance Life Insurance Products?
_______
8. Have you tried to understand the needs of the customer?
Yes No
9. If no then what type of difficulty you face?
_____________
10. Have you given sufficient information / training to help you clear the
customers queries regarding insurance plans?
Yes No

11. How many times you have contacted the existing customer?
Once in weak Once in month Once in 6 months Once in Year


106
12. Do you prepare yourself for any sales call?
Yes No

13. What kind of assistance do you need to generate more business?
Training about customer handling
Helpdesk at the branch,
Generating leads by the company

Thank You.


107
BIBLIOGRAPHY

Textbooks:
1. Marketing Management: 13
th
Edition A South Asian Perspective
Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha

2. Marketing Management
Arun Kumar, N Meenakshi

Websites: www.reliancelife.co.in
www.licindia.com

Newspaper: Business Line

Marketing Reliance Life Insurance

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