Show Project

A Summer Training Report
Subject Code: 536322(36)

On
A comparative study of Unit – linked insurance plan of met life india insurance company limited with its immediate competitors.

Submitted for partial fulfillment of requirement for the award of degree
Of Master of Business Administration Of CHHATTISGARH SWAMI VIVEKANAND TECHNICAL UNIVERSITY BHILAI (C.G.)

Session 2010-12
Supervised By External Guide
MR. KISHAN KUMBALKAR (SENIOR BUSINESS MANAGER) METLIFE INDIA INSURANCE CO. LTD.

Supervised By Internal Guide
PROF. NEHA JAIN (FACULTY OF MANAGEMENT) DIMAT (RAIPUR)

Submitted by
SHLESH KUMAR SHARMA Roll No.:5283610023 Enrollment No.:AG8664 MBA III Semester (Section- „E‟)

2011 DEPARTMENT OF MANAGEMENT
DISHA SCHOOL OF MANAGEMENT EDUCATION

(Disha Education Society) Satya Vihar, Vidhansabha-Chandrakhuri Marg, Mandir Hasaud, Raipur (C.G.) 492007
Appendix – II

DECLARATION
I the undersigned solemnly declare that the report of the Summer Training work entitled „„UNIT-LINKED INSURANCE PLAN (ULIP) OF METLIFE INDIA
INSURANCE COMPANY LIMITED AND COMPARATIVE STUDY OF THESE PLANS WITH ITS IMMEDIATE COMPETITORS ‟‟is based my own work carried

out during the course of my study under the supervision of Prof. Neha Jain I assert that the statements made and conclusions drawn are an outcome of the project work. I further declare that to the best of my knowledge and belief that the project report does not contain any part of any work which has been submitted for the award of any other degree/diploma/certificate in this University or any other University.

___________________ (Signature of the Candidate) SHLESH KUMAR SHARMA Roll.No. - 5283610023 Enrollment No.-AG8664 MBA III Semester Section-„E‟

Appendix – III

Certificate by Organization

Note: In this page you have to put the certificate received from the organization.

Appendix – IV

CERTIFICATE BY INTERNAL GUIDE

This to certify that the report of the project submitted is the outcome of the project work entitled „UNIT-LINKED INSURANCE PLAN (ULIP) OF METLIFE
INDIA INSURANCE COMPANY LIMITED AND COMPARATIVE STUDY OF THESE PLANS WITH ITS IMMEDIATE COMPETITORS

carried out by Shlesh Kumar Sharma bearing Roll No.:5283610023 & Enrollment No.:AG8664 under my guidance and supervision for the award of Degree in Master of Business Administration of Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G), India. To the best of the my knowledge the report i) ii) iii) Embodies the work of the candidate him/herself, Has duly been completed, Fulfils the requirement of the ordinance relating to the MBA degree of the University and iv) Is up to the desired standard for the purpose of which is submitted.

_______________________ (Signature of the Guide) Prof. Neha Jain (Faculty of Management) DIMAT (Raipur) The project work as mentioned above is hereby being recommended and forwarded for examination and evaluation.

Appendix –V

CERTIFICATE BY THE EXAMINERS

This is to certify that the project entitled “UNIT-LINKED INSURANCE PLAN
(ULIP) OF METLIFE INDIA INSURANCE COMPANY LIMITED AND COMPARATIVE STUDY OF THESE PLANS WITH ITS IMMEDIATE COMPETITORS‟‟

Submitted by Shlesh Kumar Sharma, Roll No.:5283610023 & Enrollment No.:AG8664 Has been examined by the undersigned as a part of the examination for the award of Master of Business Administration degree of Chhattisgarh Swami Vivekanand Technical University, Bhilai (C.G.).

________________

__________________ __________________

Name & Signature of Internal Examiner Date:

Name &Signature of External Examiner Date:

Forwarded by Academic HeadDepartment of Management

Appendix –VI

ACKNOWLEDGEMENT

In preparation of this report by me, I feel great pleasure because it gives me extensive practical knowledge in my career. I get idea about Indian Life Insurance Industry by this project.“Success is a story and failure is learning” for this inspirational thought and for directing my endeavors towards the successful completion of the report. I am very much obliged and thank full towards MetLife for their support. I express my hearty gratitude towards my company guide Mr. Kishan Kumbalkar (Senior Sales Manager) . I am also very thankful to Prof. Neha Jain (Internal Guide), Mr. Rajneesh Kumar (Class coordinator MBA III SEM) and other faculties for their extended support and guidance. Finally I express my sincere thanks to my parents and almighty who have always blessed me with their love and affection. At last but not the least my friends and each individual who directly or indirectly help me during the project work and who provided me with all their valuable time and opinion regarding my report for its successful completion.

(Signature of the student) SHLESH KUMAR SHARMA Roll. No.: 5283610023 MBA III Semester Section – „E‟

Appendix – VII

Preface
MBA is a stepping-stone to the Management carrier and to develop good Managers is necessary that the theoretical must be supplement with exposure to the real environment. Theoretical knowledge just provides the base and it‟s not sufficient to produce a good Manager that‟s why the practical knowledge is needed. Therefore the Research Project is an essential requirement for the student of MBA. This research project not only helps the students to utilize his skills properly and learn field realities but also provides a chance to the organization to find out talent among the building Managers in the very beginning. In accordance with the requirement of MBA course I have done my research project on the topic “UNIT-LINKED INSURANCE PLAN (ULIP) OF METLIFE INDIA INSURANCE COMPANY LIMITED AND COMPARATIVE STUDY OF THESE PLANS WITH ITS IMMEDIATE COMPETITORS ” with special reference to MetLife Insurance Co Ltd..

ABSTRACT

ULIP is an innovative product of the Insurance Companies. It is an Investment cum Insurance product. Its unique features have made it popular among the investors. A research study was carried out, based on the conditions prevailing in the Insurance Market and the with a view to determine the investors preference for ULIP plans and also the comparison of the plans of Metlife and its immediate competitors in Raipur. In order to facilitate data collection for research study, canopies were set up at three

places in Raipur itself. The data was collected by means of the Questionnaire designed for data collection, which was analyzed with the help of tables and diagrams. In order to facilitate research study, parameters and features of ULIP, were identified, which would be of help in designing the questionnaire. Since, ULIP involves investment of the premiums paid in the share market, it was clear that recession would have impacted people‟s decision to invest. To elicit people‟s opinion as regards the impact of recession on the decision to invest in ULIP, questions were designed and included in the questionnaire. Majority of the investors were found to have lost money due to investment in ULIP.

But since the share market in India has been showing improvements, respondents were hopeful of high returns.

TABLE OF CONTENTS

S.No. 1 2. 3.

Topic Introduction of Insurance industry Met Life Insurance Co. Ltd Research Methodology 3.1 Title of the study 3.2 Duration of the project 3.3 Objective of study 3.4. Type of research 3.5. Sample size and method of selecting sample 3.6 Limitation

Page no.

4. 5. 6. 7 8. 9. 10.

Analysis & Interpretation Facts & Findings SWOT analysis Conclusion Recommendation and Suggestions Appendix Bibliography

CHAPTER 1 INTRODUCTION TO INSURANCE INDUSTRY

1. INSURANCE INDUSTRY IN INDIA THE MEANING OF INSURANCE:Insurance is a policy from a large financial institution that offers a person, company, or other entity reimbursement or financial protection against possible future losses or damages. Insurance is important to understand for anybody that is considering buying an insurance policy or simply understanding the basics of finance. Insurance is a hedging instrument used as a precautionary measure against future contingent losses. This instrument is used for managing the possible risks of the future. Insurance is bought in order to hedge the possible risks of the future which may or may not take place. This is a mode of financially insuring that if such a incident happens then the loss does not affect the present well-being of the person or the property insured. Thus, through insurance, a person buys security and protection. A simple example will make the meaning of insurance easy to understand. A biker is always subjected to the risk of head injury. But it is not certain that the accident causing him the head injury would definitely occur. Still, people riding bikes cover their heads with helmets. This helmet in such cases acts as insurance by protecting him/her from any possible danger. The price paid was the possible inconvenience or act of wearing the helmet; this ie equivalent to the insurance premiums paid. Though loss of life or injuries incurred cannot be measured in financial terms, insurance attempts to quantify such losses financially. Insurance can be defined as the process of reimbursing or protecting a person from contingent risk of losses through financial means, in return for relatively small, regular payments to the insuring body or insurance company. Insurance can range from life to medical to general (residential, commercial property, natural incidents, burglary, etc).

Life Insurance:-

It insures the life of the person buying the Life Insurance Certificate. Once a Life Insurance is sold by a company then the company remains legally entitled to make payment to the beneficiary after the death of the policy holder.

Medical Insurance:This is also known as mediclaim. Here, the policy holder is entitled to receive the amount spent for his health purposes from the insurance company.

General Insurance:This insurance type involves insuring the risks associated with the general life such as automobiles, business related, natural incidents, commercial and residential properties, etc.

1.1 INDIAN INSURANCE MARKET – HISTORY

The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries.

A BRIEF HISTORY OF THE INSURANCE SECTOR:-

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 by the central government and nationalised. 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 (Nationalisation) Act, 1972 nationalised the general insurance business in India with effect from 1st January 1973.



107 insurers 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. GIC incorporated as a company.

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:

1) 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.

2) 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 allowed to operate in the rural market. Only One State Level Life Insurance Company should be allowed to operate in each state.

3) 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.

4) 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).

5) 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. Computerisation 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. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs.100 crores. 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.

Insurance Industry:The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should open 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. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs. 100 crores. The committee felt the need to provide greater autonomy to insurance companies in order to improve.

Insurance Regulatory Authority:On the recommendations of the Malhotra Committee, government has set up an interim Insurance Regulatory Authority (IRA), with a view to activate an insurance regulatory apparatus essential for proper monitoring and control of the insurance industry.

The IRA is headed by a chairman who is also Controller o0f insurance and chairman of TBC. The other members of the IRA, not exceeding seven in number of whom not more than three shall serve full time, shall be nominated by the central government.

4 I‟s Of Insurance Service:The 4 I‟s refers to the different dimensions/ characteristics of any service. Unlike pure product, services have its own characteristics and its related problems. So the service provider needs to deal with these problems accordingly. The service provider has to design different strategies according the varying feature of the service. These 4 I‟s not only represent the characteristics of different services but also the problems and advantages attached to it. These 4 I‟s can be broadly classified as: • Intangibility • Inconsistency • Inseparability • Inventory • Intangibility:Insurance is a guarantee against risk and neither the risk nor the guarantee is tangible. Hence, insurance rightly come under services, which are intangible. Efforts have been made by the insurance companies to make insurance tangible to some extent by including letters and forms. • Inconsistency:Service quality is often inconsistent. This is because service personnel have different capabilities, which vary in performance from day to day. This problem of inconsistency in service quality can be reduced through standardization, training and mechanization.

• Inseparability:Services are produced and consumed simultaneously. Consumers cannot and do not separate the deliverer of the service from the service itself. Interaction between consumer and the service provider varies based on whether consumer must be physically present to receive the service.

• Inventory:No inventory can be maintained for services. Inventory carrying costs are more subjective and lead to idle production capacity. When the service is available but there is no demand, cost rises as, cost of paying the people and overhead remains constant even though the people are not required to provide services due to lack of demand. In the insurance sector however, commission is paid to the agents on each policy that they sell. Hence, not much inventory cost is wasted on idle inventory. As the cost of agents is directly proportionate to the policy sold.

Some of the General Rules:1. Mis-description:The insurance policy shall be void and all the premiums paid by insured may be forfeited by the insurance company in the event of mis-presentation or misdeclaration and/or nondisclosure of any material facts.

2. Reasonable Care:The insured shall take all reasonable steps to safeguard the property insured against any loss or damage. Insured shall exercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent all accidents and shall comply with all statuary or other regulations

3. Fraud:If any claim under the policy may be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the insured‟s behalf to obtain any benefit under the insurance policy, all the benefits under the insurance policy may be forfeited.

4. Few Basic Principles Of Life Insurance Are :1. Insurable interest 2. Utmost good faith 3. Subrogation

4. Contribution 5. Indemnity 5 Risks of loss not covered under general insurance are: The loss or damage or liability or expenses whether direct or indirect occasion by happening through or arising from any consequences of war, invasion, act of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion revolution, civil commotion or loot or pillage in connection therewith and loss or damage caused by depreciation or wear and tear. However the risk of loss or damage by war can be insured by payment of additional premium in some cases only.

Product Levels:
In this figure there is a nucleus or core in the center, which is supported by series of tangible and intangible features and benefits and these form a cluster around the core product. AUGMENTED CORE POTENTIAL EXPECTED Level Type Of Service:Contents Insurance sector 1 . Core service Basic service product •   Life insurance policy Non-life insurance policy

2. Expected service Basic product and minimum purchase conditions that must be met. • After sales service • Low claim settling period. 3. Augmented service Something different, which enables one product to be differentiated from other

• Technology • Online premium payment • Payment through credit cards • Standing instruction to bank 4. Potential service Features that attract the customers and are useful to them. • Maturity claims settled on or before the maturity date. Loans:The core product of insurance company is insuring life and non life products. People opt for this service as they want to secure their life, people dependent on them and other valuable things in life. The time factor plays an important role while providing service to the customer. The customer expects that the procedures for settling the claim should be short and not much time consuming. They should get the benefits of the service as soon as possible. Today the technology is boosting in each and every field. Insurance is not an exception. Companies have started providing customers facility of online payment of premium through their websites. They also provide online assistant to the customer the policy status and how to calculate the premium. To calculate the premium they just need the present age, the type of police, sum assured, and accident covered if any. By filling in this information you can calculate the amount of premium you have to pay. The customer can pay their premiums by means of credit cards or can also give standing instruction to the bank in order to pay their monthly premiums. The insurance companies also provide loan facilities against their policies. At present loans are granted on unencumbered polices as follows: Up to 90% of the Surrender Value for policies, where the premium due is fully paid up , and Up to 85% of the Surrender Value for policies where the premium due is partly paidup. The minimum amount for which a loan can be granted under a policy is Rs150. The rate of interest charged is 10.5% p.a., payable half-yearly.

Loans are not granted for a period shorter than six months, or on the security of lost policies (the assured must have the duplicate policies) or on policies issued under certain plans. Certain types of policies are, however, without loan facility.

FREQUENT TERMS USED
Agent: An insurance company representative licensed by the state, who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder far the insurer. Actual Total Loss: It is a loss where the goods are completely lost and become irrecoverable additional cover: An insurance policy extended to cover additional risk perils such as strikes. Riots and Civil commotion etc on payment of extra premium. Agreed Value Policy:Policy which undertakes to pay a specified amount in case of total loss. Under this case the policy does not take into account the current market value. Assessor:Person who estimates the value of goods for the purpose of apportioning the sum payable by the underwriters to settle the claims. Also called as Surveyor. Assured:Party indemnified against 19ss by means of insurance. Burglary:It is a theft committed by breaking into or out of the premises. Evidence of breaking In, Is necessary. Coverage:-

The scope of protection provided under a contract of insurance; any of several risks covered by a policy. Cargo insurance:A generic term used in both inland marine and ocean marine insurance to designate the type‟s of insurance available to provide coverage for cargo that is being transported by truck, rail, air, ship, or boat. Certificate of Insurance:A statement of coverage issued to an individual insured, specifying the insurance benefits and principal provisions applicable to the member. Claim:The formal request by a policyholder or a claimant for payment of loss under an insurance policy. Co-insurance:A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ration which the amount of insurance bears to the amount required;

Cover Note:Is the document that is issued provisionary pending issuance of insurance Policy. Indemnity:Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss. Insurable Interest:A condition in which the person applying for insurance and the person who is to receive the policy benefit will suffer all emotional or financial loss, if any untouched event occurs. Without insurable interest, an insurance contract is invalid, Insurance:-

Social device for minimizing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss. Net Premium:The portion of premium rate which is designed to cover benefits of the policy, excluding expenses, contingencies and profit. Policy:Is the legal document that has the conditions of the insurance contract? Premium:It is the amount paid to secure an insurance policy. Salvage:Recovery made by an insurance company by the sale of property which has been taken over from that insured as a part of loss settlement. The remains of damaged vehicle or any other property. Third party:Any person other than the two parties signing an insurance, contract. Underwriting:Underwriting of a risk involves consideration of material, facts on the basis of which a MAJOR POLICY CHANGES:Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999, Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate, promote and ensure orderly growth of the insurance industry. IRDA Act 1999 paved the way for the entry of private players into the insurance market which was hitherto the exclusive privilege of public sector insurance companies/ corporations. Under the new dispensation Indian insurance companies in private sector were permitted to operate in India with the following conditions:



Company is formed and registered under the Companies Act, 1956;



The aggregate holdings of equity shares by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26%, paid up equity capital of such Indian insurance company;



The company's sole purpose is to carry on life insurance business or general insurance business or reinsurance business.



The minimum paid up equity capital for life or general insurance business is Rs.100 crores.



The minimum paid up equity capital for carrying on reinsurance business has been prescribed as Rs.200 crores.

The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad.

PROTECTION OF THE INTEREST OF POLICY HOLDERS:IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps:


IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressal machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.



The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.



It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public.



All insurers are required to set up proper grievance redress machinery in their head office and at their other offices.



The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract.

1.2 INSURANCE MARKET - PRESENT

The insurance sector was opened up for private participation eight years ago. For years now, the private players are active in the liberalized environment. The insurance market has witnessed dynamic changes, which include presence of a fairly large number of insurers in both life, and non-life segment. Most of the private insurance companies have formed joint ventures with wellrecognized foreign players across the globe. India‟s life insurance market has grown rapidly from 2001 to 2009.

New business premiums have grown at 41% compounded annual growth rate (CAGR). Life insurance market in India will double by2012.

1.3 CAPITAL REQUIREMENTS AND FOREIGN PARTICIPATION

Minimum capital requirement for direct life and Non-life Insurance company is INR 1000 million and that for reinsurance company is INR 2000million.

A maximum 26% foreign equity stake is allowed in direct insurance and reinsurance companies. In the 2004-05 budget, the Government proposed for increasing the foreign equity stake to 49%, this has now come into effect.

There are a total of 13 life insurance companies operating in India, of which one is

a Public Sector Undertaking and the balance 12 are Private Sector Enterprises.

INSURANCE COMPANIES:

IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business.

Particulars of the life insurance companies and general insurance companies including their web address is given below:

Table 1.1

Different Insurance companies operating in the Indian

Insurance Sector

LIFE INSURERS

Websites

Public Sector Life Insurance Corporation of India Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com www.licindia.com

GENERAL INSURERS

Public Sector National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in

Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com

CHAPTER 2 ABOUT METLIFE INSURANCE

2.1 MetLife: A Life Insurance Giant:With over 140 years of experience in Insurance business Metlife has been named by Forbes as the Best Managed Insurance Co. in the Industry for 2008, an honour based on the track record of the financial performance, innovation, leadership and execution shown by Metlife over years.

Metlife has also been ranked 43 on the Fortune 500(2008), the MetLife companies are one of the world‟s largest, strongest and most respected financial organizations. To add to its cap is another feather in the form of its No.1 ranking in several group product areas, including life, disability, auto and home, as well as institutional annuities.

Metlife serves over 90 of the top 100 FORTUNE 500 companies. It has around $558.6 Billion Assets under Management, more than 49,400 employees worldwide and more than 70 million customers around the world.

Metlife is a truely global organization with distribution access to over 47 countries, some of which include The Americas (Argentina,Brazil,Chile,Mexico, United States, Uruguay);(EMEIA) (Belgium,Ireland, Poland, UK (3), India);Asia Pacific (Australia, China, Hong Kong, Japan, South Korea, Taiwan) 2.2 Metlife: Vision To build financial freedom for everyone. 2.3 Metlife: Core Values The core values of Metlife include : People Count , Financial Strength ,Partnership, Personal Responsibility, Innovation and Integrity & Honesty.  People Count: It's all about People, MetLife's key resource. MetLife will succeed because we are winning from within.



Financial Strength: Operating with an intense dedication to managing monetary resources for strong business results.



Partnership: Functioning productively in teams towards a common purpose; realising the collective power of diverse work-groups.



Personal Responsibility: "Coming into your own", performing as a Leader to be really effective and successful by acting and making decisions independently to get results.



Innovation: Continuously creating and introducing new and original ideas and ways of doing things.



Integrity & Honesty: Conducting all business endeavours with truth, sincerity and fairness.

2.4 Metlife India Insurance Company Limited (Metlife):Metlife commenced its operations in India in 2001 and since then the company has shown a double digit growth, even in 2008 the company showed a growth of 14%. MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors, with 25% stake in the hands of Metlife International and the sremaining 75% stake with its Indian Partners. Besides, its Bancassurance Partners include Axis Bank, Barclays Bank, Dhanalakshmi Bank, J & K Bank, and Karnataka Bank. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife has more than 50,000 Financial Advisors, who help customers achieve peace of mind across the length and breadth of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States (based on life insurance inforce), with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500® companies. The

MetLife companies offer life insurance, annuities, automobile and home insurance, retail FACT SHEET

banking and other financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Metlife in India enjoys a Pan India Geographical Presence with over 112 branches in over 87 cities. (As in May 2008).. Table 2.1 Parameters Offices Agency Units Paid Up capital( in crores) AFYP (in Crores) Market share Banca tie ups Agent base Performance of Metlife based on Key Parameters 2008 49 101 536 220 1.8% 3 <10,000 August 2010 114 222 1480 555.2 3% 5 31,895

Founded Started Operation Headquarters World Wide Web Address Managing Director Employees Financial Advisors Bancassurance Tie-Ups Number Of Products Presence Through MetLife Offices Presence Through Bank Partners

2001 FY 2001-02 Bangalore, India www.metlife.co.in Rajesh Relan 7688 56,072 5 (J&K Bank/Axis Bank/Dhanalakshmi Bank/Karnataka Bank/Barclays) Over 20 products 192 offices in 131 cities 1910 offices in 686 cities

Met Life Partners:-

2.5 List of Products Offered By Metlife India a. Traditional Products:     Met Suraksha (pure term plan) Met Suvidha ( endowment plan) Met Bhavishya (money back plan)
Met Sukh (money back plan)

b.ULIP (Unit Linked Insurance Plan):  Met Growth

  

Met Easy plus Met Gold Met Smart Life

(1)INVESTMENT PLAN:     (2)HEALTH PLAN: Health Care Met Smart Life Met Easy Plus Met Wealth Plus Met Gold Plus Met Fortune Plus

(3)MONTHLY INCOME: Met Monthly Income Plan(MMIP)

(4)RURAL PLAN:  Met Vishwas Met Suvidha

(5)PROTECTION PLAN:   (6)SAVING PLAN:   Met Sukh Met Suvidha Met 100 Met Suraksha Met Suraksha Plus Met Mortage Protector Plus

(7)RETIREMENT PLAN:  (8)CHILD PLAN:    Met Bhavishya Met Junior Endowment Met Junior Money Back Met Magic Plus Met Growth Super Met Pension Plus

CHAPTER 3 RESEARCH METHODOLOGY

3.1 Introduction :The marketing of insurance policies involves unique practices when compared to the marketing of any other product. Insurance policies are intangible in nature, so people do not realize the need and importance of insurance. But with the advent of private players in the Indian Insurance Sector, there has been an increase in the awareness among the general public as regards the importance of insurance.

At the same time, the products offered by insurance companies have been innovated over a period of time. Unit Linked Insurance Plans (ULIP) is also an outcome of the innovation undertaken by the insurance companies.

3.1.1

About Unit Linked Insurance Plans (ULIP):-

Till recently, individuals seeking to provide protection to their family had no other option except a life insurance term plan. The plan promised a stipulated amount to the family of policyholder in the event of his death.

However, the insurance sector has evolved over the last few years and a number of innovative products have been introduced in the market. One product category that is increasingly catching the fancy of individuals is the Unit linked Insurance Plan (ULIP).

These plans, are a combination of insurance and investment and they provide the policyholder with life cover and in addition to that offer the opportunity to earn returns on the premium paid.

ULIPs give investors the best of both worlds -- risk cover and high returns. These combine life cover with the potential for a bigger nest egg. ULIPs are insurance policies in which the investment element, expenses and benefits are to the account of the policy holder.

The unit linked product in the long run is a very effective and efficient product on offer for the customers, both in terms of returns and costs. The basic investments are identifiable. The assets of the fund can be equity share, fixed income securities, money market instrument, property and derivative instruments.

ULIPs are riding high these days on their equity investments, increasingly making their presence felt as savings and investment tools, a trend that is getting reflected in terms of both performance and average ticket size.

Unit-linked products, the domain of which is seen to be expanding steadily, will continue to attract sections of the investing populace. (based on the performance of these plans and people‟s interest towards this innovative product.)

ULIPs, which are contemporary products across the world, are fast gaining in popularity in India. Some of the factors contributing to their success are the simplicity, transparency and flexibility of these plans.

These policies are adaptable to the changing needs of the customers over their lifetime. They also give the choice to the customers to select an investment fund based on their risk profile and offer all the benefits of a traditional life insurance plan. The response to these plans is so encouraging that more and more players launching their versions of ULIP.

Today, ULIP accounts for the bulk of the first year premium income that most insurers earn going as high as 95 per cent for Birla Sun Life and ICICI Prudential.

According to data released by IRDA for April- December 2006, ULIP constituted almost 50% of the total portfolio in terms of premium income, a rise of 5% over the previous corresponding period.

Premium earned from ULIP increased as much as 127% in the same period. Even in LIC during the previous fiscal, ULIPs contributed 72% of individual business portfolio, compared to just 50% during 2005-06.

Share of traditional products in private insurers‟ total portfolio has declined from 21% during April-December 2005 to 13% in April-December 2006. In case of LIC in declined from 68% to 61% during the same period. In simple terms ULIP is an Investment cum Insurance product, which works as a mutual fund on one hand and an insurance product on the other hand. The entire investment made is kept in the guaranteed fund in the first year. This guaranteed fund forms the basis of loyalty additions paid by the company in the 10th year and later years.

The entire amount is invested in the share market from the second year onwards, depending on the debt-equity ratio decided by the policy holder. On the insurance side of ULIP, the policy holders are offered 5 or 10 or 20 times of the premium paid as insurance cover as chosen by them.

ULIPs being more lucrative in terms of returns associated with them, are preferred by customers over other insurance products.

The Research study is directed towards determining the Customers preference for ULIPs. In addition to this the age influences the people‟s decision to invest in UlIPs, so finding out the most suitable age for ULIP investors would help the company in segmenting and accordingly targeting people based on the need analysis.

3.1. Title of the Study:-

“UNIT-LINKED INSURANCE PLAN (ULIP) OF METLIFE INDIA INSURANCE
COMPANY LIMITED AND COMPARATIVE STUDY OF THESE PLANS WITH ITS IMMEDIATE COMPETITORS”

3.2 Duration of the Project:45 days

3.3 Objectives of Research Study   To determine Customer‟s preference for ULIP To study the preference of the customer among the selected private insurance companies viz. Bajaj Allianz, ICICI Prudential, Reliance Life as compared to Metlife India   To determine the parameters on which the ULIP plans of METLIFE need improvement. To determine the degree (level) of impact of age on the buying behaviour and finding out the most suitable AGE for ULIP

3.4 Type Of Research  Quantitative as well as Qualitative

3.5 Sample Size And Method Of Selecting Sample  Research Design   Questionnaire

Data Collection

There are two types of data collection they are as follows

1. Primary data and 2. Secondary data 1. Primary Data:-it is collected through survey. It can be collect in following ways:     Observation Personal interview Telephone interviews Mailing of questionnaire Schedules

2. Secondary Data:-they are those which have already been collected by someone else which has already been passed through statistical process. Sources of secondary data    Internet Reports Newspapers Books, etc.



Sampling Method  Simple random sampling



Data Universe  12,00,000 people (census 2006)



Sample Size    100 clients Confidence level 95% Confidence interval 10%

3.5.1 Methodology:The study was aimed at measuring the customer‟s preference for life insurance

companies and the comparison of ULIP plans of the selected companies on basis of various parameters considered essential for determining where METLIFE‟s ULIP plans could be improved.

In all 100 questionnaires were filled up during the data collection process.

The methods used for data collection were:

1. Field survey method 2. Personal interview technique 3. Secondary sources viz. company database

The data collected was represented in the form of tables for drawing inferences. Quantitative techniques like averages, percentages, range, two-way tables, Data analysis were applied as required.

The level of preference, perception of the customers about the product and company were identified by means of questions in the questionnaire asking the respondents to rate their preferences on a scale of 1 to 7. For the representation of data various charts and graphs have been used as per requirement.

In order to make the comparative study possible, parameters were chosen and questions were designed eliciting ratings from the respondents. These ratings were tabulated and then represented by means of line diagrams.

3.5.2 Time And Cost Expectation:-

The time involved in the data collection was 3 days as canopies were set up on the verious places in Raipur on 3 different days. This was followed by analysis of the data collected with the help of Excel and spss

During the process of data collection, considerable amount of time was spent in explaining the purpose and the exact nature of the data required from the questionnaires filled. In addition to this, in some cases questions had to be explained to the respondents. Moreover, for some questionnaires had to be filled in as they were not so well read and literate.

The cost involved was basically on the stationary as the canopies were provided by the company.(Metlife)

3.5.3 Factors Influencing The Buyers Decision To Invest In ULIP

The decision to invest in ULIP plans varies from person to person. It depends upon many factors. The factors can be classified into personal, social, economic, psychological and company related variables.

Age and experience of policyholder are personal factors, while education is a social factor. Economic factors include occupation, income and wealth, and the psychological factors consist of perception, satisfaction about the services rendered by insurance companies, the impact of advertisement and personal selling made by insurance companies on policyholders.

Amongst the above mentioned factors, age directly influences people‟s decision to invest in ULIP. Questions regarding the scaling of age as a factor influencing the investment decision have been included in the questionnaire as also determining the most suitable age for investment in ULIP plans, based on customer preferences. This would be of great help to the company in segmenting and accordingly target prospective customers. Comparative study being one of the objectives of the research study, four parameters namely premium charged, flexibility, number of funds and transparency were identified. These are effectively the factors which influence the people‟s selection of the Insurance Company, keeping in mind the product (ULIP) features.

Questionnaire has been designed to elicit preferences of the respondents for the selected Insurance Companies, on the above mentioned parameters. 3.6LIMITATIONS: Some of the difficulties and limitations faced by me during my training are as follows:



Lack of awareness among the people – This is the biggest limitation found in this sector. Most of the people are not aware about the importance and the necessity of the insurance in their life. They are not aware how useful life insurance can be for their family members if something happens to them.



Perception of the people towards Insurance sector – People still consider insurance just as a Tax saving device. So today also there is always a rush to buy an Insurance Policy only at the end of the financial year like January, February and March making the other 9 months dry for this business.



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



Lack of awareness about the earning opportunity in the Insurance sector – People still today are not aware about the earning opportunity that the Insurance sector gives. After the privatization of the insurance sector many private giants have entered the insurance sector. These private companies in order to beat the competition and to increase their Insurance Advisors to increase their reach to the customers are giving very high commission rates but people are not aware of that.



Increased competition – Today the competition in the Insurance sector has became very stiff. Currently there are 14 Life Insurance companies working in India including the LIC (life insurance Corporation of India). Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market. This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very very difficult

 Others:    Time constraints Small sample size Busy schedule of corporate guide and his team. Business Month End Closing

CHAPTER 4 ANALYSIS AND INTERPRETATION

4.1 Customer Preference For ULIPs
ULIP being an innovative product, provides the customers with both investment and insurance options. In addition to this ULIP provides other benefits like, Capital Appreciation, Inflation Protection, Tax Benefit. However, people hesitate to invest in ULIP due to the risks associated with it and also the illiquidity associated with it, due to the Lock-in-Period. (3Years)

With a view to determine the customers preference for ULIP, two broad factors were identified viz. Risk-Return Factors and Other Parameters (Capital appreciation, Inflation protection and Liquidity)

The following Table shows the data obtained from the respondents:

Table 4.1.1

Customer Preference For ULIP

Parameters

High ( in %)

Low ( in %) 35% 75% 10% 85%

Returns from Ulip Costs associated with Ulip Risks associated with Ulip Liquidity of Ulip Inflation protection through Ulip
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% returns costs risks 25% 65% 90% 75% 35% 10%

65% 25% 90% 15% 67%

33

33%

85% low high 67%

15% liquidity inflation protection

Figure 4.1.1 Customer Preference For ULIP

From the above diagram, it can be inferred that 65% of the respondents think that the returns associated with ULIPs are high and 35% think returns are low. Similarly, only 75% of the

respondents consider the cost associated with ULIPs to be high. Moreover, 67% of the respondents agree that ULIPs offer inflation protection.

From these figures, it can be inferred that the customers have a high preference for ULIP plans due to the high returns, low cost and inflation protection offered by it, in addition to the tax benefit that it offers.

On the flip side, 90% of the respondents are of the opinion that high risks are associated with ULIP. Moreover, recessionary conditions have added to the risks with investment in ULIP.

In addition to this, as many as 85% of the respondents consider ULIP plans to be illiquid. This is because once the money has been invested in Ulip, it can be withdrawn only after 3 years, and this withdrawal comes at a cost as charges are deducted by the insurance company and tax benefits can no longer be availed by the investors.

So, it can be concluded that:



People prefer ULIPs due to the high returns, low costs associated with them and inflation protection offered by them.



People hesitate to invest in ULIP due to high risks and low liquidity associated with them.

4.2 The Influence Of Age On The Decision To Invest in ULIPs

Age is a crucial factor in making the decision to invest in ULIP plans. The age of the people directly influences their willingness to bear risks. The younger the people , the more is the willingness to bear risks and the older, the less is the willingness to bear risks.

Questions eliciting respondents opinion regarding, age as a factor in making investment decisions have been included in the questionnaire.

The respondents gave their opinion by rating the age related statements on a scale of 1 to 7. Their responses have been tabulated and represented by means of a line diagram below.

Table 4.2.1 Age and the Decision To Invest In ULIP

Agree Parameters 1 40 Age directly 2 30 3 10 4 5 5

Disagree 6 3 7 2 Total 100

10

influences decision invest in Ulip to

1 Ulip is a Social Security Tool

3

5

11

15

20

45

100

50 45 40 35 30 25 20 15 10 5 0 age influences investment decision ulip as a social security tool

Figure 4.2.1 Influence Of Age In taking The Decision To Invest In ULIP

From the above diagram it is clear that majority of the respondents have agreed to the fact that the age of the investor directly influences their decision to invest in Ulip plans. As many as 70 respondents marked 1 or 2 as their answer, implying that they agree to the statement that age directly influencesthe decision to invest.

On the other hand, when asked about their opinion about ulip as a social security tool, as many as 65 respondents marked 6 or 7 as their answer, meaning that they disagree with the statement that Ulip acts as a social security tool.

This gives a fair idea, that the most suitable age for investment in Ulip as per respondents opinion would be somewhere above 20 , but less than 55 years of age.

Although, ulip is a product which is suitable for all age groups, but the investment decision depends on the willingness to take risks, which declines with age.

The following table shows the responses of the respondents as regards the most suitable age for investment in Ulip plans.

Table 4.2.2 Most Suitable Age For Investment In ULIP

Age groups Below 20 20 – 30 30 – 40 40 – 55 Above 55 Total

Number of Respondents 10 15 55 15 5 100

The above table shows that the age group 30 to 40 has been marked by the respondents as the most suitable age for investment in ULIP plans. It can inferred that the people belonging to this age group are most willing to take risks, as they are well settled and are earning and are ready to invest.

This is the age group which the company should target for the sale of ULIP plans. This will help the company in saving the time wasted in convincing the prospects other than the preferred age group to invest in ULIP plans.

If the segmentation and targeting for ULIP plans is done keeping in mind the most suitable age group as mentioned above, then the sales of company‟s ULIP Plans can be increased in a short span of time.

Below is a Bar Diagram showing the most suitable age as per the opinion of the respondents.

Most Suitable Age For Investment In ULIP
above 55

40-55

30-40

Number of Respondents

20-30

below 20 0 10 20 30 40 50 60

Figure 4.2.2 Determining The Most Suitable Age For Investment In ULIP 4.3 Comparison Of ULIP Plans Of Metlife With Other Players ( 3 Immediate Competitors Of Metlife )
Based on the company sources, Baja Allianz, ICICI Prudential, Om Kotak Mahindra Life Insurance have been identified as Metlife‟s immediate competitors in Raipur.

The Questionnaire contained questions eliciting the respondents opinion about their preference for the company.

For eliciting customers preference regarding investment in ULIP plans of the selected Insurance companies, four parameters were identified for the purpose of comparison.

These parameters were:

i. ii.

Premium charged for ULIP products. Flexibility in terms of the number of times the type of fund in which the money is to be invested in case of ULIP products is permitted.

iii. iv.

The number of fund options between which the investor can switch.
The Transparency of the work of the agents and employees of the company.

Based on the data collected the following table has been drawn, which shows the customer preferences for the chosen companies as regards the identified parameters. Table 4.3.1 Customer Preference For Different Insurance Companies Parameters / Companies Reasonable Premium 55% agreed 45% disagreed 50% agreed 50% disagreed 49% agreed 51% disagreed Metlife Bajaj Allianz ICICI Prudential Om Kotak

Mahindra Life 41% agreed 59% disagreed

Greater Flexibilty

58% agreed 42% disagreed

50% agreed 50% disagreed

57% agreed 43% disagreed

42% agreed 58% disagreed

Greater Number 45% agreed of funds 55% disagreed

55% agreed 45% disagreed

61% agreed 39% disagreed

32% agreed 68% disagreed

More Transparent

35% agreed 65% disagreed

47% agreed 53% disagreed

51% agreed 49% disagreed

24% agreed 76% disagreed

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Reasonable Premium Greater flexibility Greater number of More Transparent funds 55% 58% 45% 35% disagreed Agreed 45% 42% 55% 65%

Figure 4.3.1 Customer Preference For Metlife
The above diagram shows that, respondents are of the opinion that Metlife charges Reasonable Premium, as many as 55% of the respondents agreed to this. 58% of the respondents agreed that Metlife‟s Ulip plans offer greater flexibility. However, only 45% agreed that the number of funds offered to the investors for switching is high. At the same time, investors are of the opinion that, Metlife‟s agents and employees should be transparent in their work and the investors should be informed about their functioning. It becomes clear that Metlife needs to work on : a) The number of funds available to the investors for switching

b) The Transparency of the Company‟s Agents and Employees. Below, a line diagram has been drawn which shows the percentage of respondents who responded favourably for the different Insurance companies, based on the features of the Ulip plans offered by them to the investors.

70%

60%

50%

40%

Metlife Bajaj Allianz ICICI Prudential

30%

20%

Om Kotak Mahindra Life

10%

0% Reasonable Premium Greater Flexibilty Greater Number Of Funds More Transparency

Figure 4.3.2 Comparison Based on Customer Preference
The respondents have responded most favourably for ICICI Prudential , as is evident from the above diagram. Metlife and Bajaj Allianz have been responded by the investors in almost the same way. However, there have been a few differences in the responses in terms of the flexibility offered by ULIP plans of the two companies, wherein 58% of the respondents consider that Metlife‟s Ulip plans offer greater flexibility and as against this only 50% of the respondents agreed that Bajaj‟s Ulip plans offer flexibility. As regards transparency, respondents consider that Bajaj‟s employees work with greater transparency as compared to Metlife‟s employees. This is evident, since only 35% of the respondents agreed that there is more transparency in Metlife, whereas in the case of Bajaj, this figure came out to be 47%. Om Kotak Mahindra, another close competitor of Metlife has been rated as the lowest, as the respondents have responded the least favourably for Kotak Mahindra. Only 24% of the respondents agreed that the employees of Kotak Mahindra work transparently, 41% agreed that their premiums are reasonable, 42% agreed that Ulip plans offered by Kotak offer Greater

Flexibilty and as low as 32% consider that Kotak offers greater number of funds for switching purposes.

So, from the above discussion it can be effectively concluded that:  Respondents consider that the premiums charged for Metlife‟s Ulip plans are reasonable.



Flexibility offered to the investors in terms of the number of times they can switch between different funds as regards Ulip is also satisfactory in the case of Metlife‟s Ulip plans.



However, the company needs to improve upon the number of funds available to the investors and the transparency of its employees.

CHAPTER5 FACTS AND FINDING

5.2

My Learnings:-

The Summer Internship Project done at Metlife India Insurance Limited has been extremely helpful in enhancing overall selling and analytical skills. As part of the training program, a 7 day training session was kept, wherein the fundamentals of Insurance were explained in full details. This was followed by an online exam conducted by the IRDA( Insurance Regulatory And Development Authority). After the exam was cleared, a two day training session called the CST (Compliance and Sales Training ) was conducted to well equip the trainees to sell and close deals. As part of the CST, all the major products of Metlife were explained. Then began selling, where the first step was prospecting i.e., filling My Market 100, who shall be called upon for sales purposes. Moving on, the first stage of maturity was considered to be when one is successful in obtaining time from the prospect to meet them. While calling your prospect in order to fix meeting time ensure the following:      Do not sound needy Come straight to the point Ensure the prospect that their time will not be wasted Remain polite throughout while talking Prepare your script before calling

While on call (meeting your prospect on the date and time given by him/her), one has to ensure the following:   Try to analyze the need of the prospect Explain the importance of insurance

    

If required , show your license Give them in written the documents they need to submit Give them an illustration of the premium payable Ask for references Follow up

In addition to the Sales done, a Research Project as per the objectives mentioned above, helped in enhancing analytical abilities.

5.2 Benefits To The Company:In terms of the recommendations given above, the company will benefit immensely if these are implemented. Besides, the following benefits will accrue to Metlife from the research study conducted:  A fair idea of the current and prospective investors‟ opinion about Unit Linked Insurance Plans (ULIP), based on the risk and returns associated with Ulips and the unique features and benefits offered by Ulip plans.  The impact of recession on the people‟s decision to invest in Ulips has also been brought out through questions in the questionnaire. As many as 67% of the respondents were of the opinion that recession has badly impacted their decision to invest in Ulip. Investors have lost a major share of the money invested in Ulips due to the current recessionary conditions. However, 33% of the respondents felt that Asia is not much effected due to recession and thereby, it does not affect their investment decisions.  Segmenting the market for ULIP according to the most suitable age as per the respondents‟ opinion. This will also save the company the time in offering wrong products to wrong customers. In other words, keeping in mind the age of the investor, a suitable plan can be offered and a sale obtained without much difficulties.  Comparative study of Metlife with its 3 immediate competitors in Raipur ( identified as per company sources) would also be of help to the company. This has helped in bringing out the areas of improvement and modifications in the existing ULIP plans

of Metlife keeping in mind customer‟s preference. These modification and improvements have been mentioned above in the recommendations.

CHAPTER 6 SWOT ANALYSIS

STRENGTHS:1. Distribution network is wide as compared to others. 2. Met life has a unique service & scheme. 3. Healthy relationship with customer. 4. Good commission in selling of product.

WEAKNESSES:1. 2. Comparatively less awareness in the market Delivery problem

3.

Less coordination between organization employees

OPPORTUNITIES:1. Product is different as compare to others 2. Rural area is untapped

THREATS:1. Competitors are offering better services 2. Infiltration

CHAPTER 7 CONCLUSION

Conclusion :From the above discussions it can be concluded that, the Research Project undertaken at Metlife India Insurance Limited, has been of great help both to the company for the reasons discussed above and to the trainee. Sales, which had to be accomplished as a part of the Summer Internship, has been of immense help in developing basic sales & marketing skills. Following have been my achievements, during the Summer Internship Period:  Survey done with interest of Metlife India Insurance Co. Ltd. has been conducted successfully and results are discussed above.



Sales done during the Internship Period has helped in improving selling

skills.



Entitled to commission on the sales achieved as per the company norms.



Corporate exposure and building networks during the Internship Period.

Finally, to conclude, Insurance Industry is a Sunrise Industry with opportunities for one and all. Particularly in India there is more to insure as the rural sector remains majorly uninsured and even those insured are under insured.

The importance of insurance and the scope it has in India is evident from the fact that the major business houses have ventured in the Insurance Sector, since the opening up of this sector for private players. What remains to be achieved, is the trust and faith of the general public in the private players.

In addition to this, the continuous innovation undertaken by the private players has widened the horizons of the Insurance Sector in India. But there is still a lot that can be achieved as far as insurance in India is concerned.The percentage of those insured can be effectively increased by bringing about a change in the mentality of the people regarding insurance.It is time that we start

taking insurance in the right spirit, rather than as a liability, especially in today‟s risky and dynamic environment.

CHAPTER 8 RECOMMENDATION AND SUGGESTION

8.1 Recommendations to the Company:During the surveys that were conducted and while interacting with people of Raipur, it was observed that:   There is a lack of awareness among the people about Metlife and its products. People fear that they may end up losing money by making an investment in the products of Metlife.  Investors are of the opinion that the work of Metlife‟s employees should be made more transparent.  As regards Ulip plans of Metlife, it has been found that the number of funds available for switching should be increased, thereby enhancing the choices to the investors.

Based on the above findings, the following recommendations have been made to the company: 

Advertisements: With the objective of spreading awareness about the
company and its products, Metlife should increase its expenditure on advertisements in the form of T.V. Commercials, advertisements in the local dailies, pamphlet distribution and by means of radio. This will not only help the company to increase its sales, but also enhance the trust and the faith among the people with regard to the existence of the company and its products.



Transparency: In order to enhance the trust of the people in the company and
its fair & just working, it is recommended that the company should make the working of its agents and its employees more transparent. The investors can be provided with statements showing the earnings and the sales of the agents as also a statement showing the benefits the investors will get through the investments made.



Modify Existing ULIP Plans: As is evident from the comparative study of
Ulip plans of Metlife, Bajaj Allianz, ICICI Prudential and Om Kotak Mahindra

Life that as regards premium charged and flexibility, the Ulip plans of Metlife need not much improvement. This is because the respondents are of the opinion that, premium charged for Ulips are reasonable and these plans offer greater flexibility.

However, the Ulip plans of Metlife need improvement with regard to the number of types of funds that are available for switching. Along with greater transparency and increased number of funds, the Ulip plans of Metlife can be made more favourable for the prospective investors.

CHAPTER 9 APPENDIXES

9.1 Questionnaire
Dear Sir / Madam, I shlesh kumar sharma student of „ DISHA SCHOOL OF MANAGEMENT AND EDUCATION RAIPUR’ pursuing my 3
rd

SEM MBA from

CSVT University has to submit a project on “ A comparative study of Unit – linked insurance plan of met life India insurance company limited with its immediate competitors” I will be very thankful if you spare few moments of your precious
time to give your valuable answer for the following questions, which will be of a great help to me.

PERSONAL INFORMATION: Q1) Specify your GENDER: a)Male b) Female

Q2) Specify your AGE: a) Below 20 c) 35 – 45 b) 20 – 35

d) Above 45

Q3) Specify your OCCUPATION: a) Business Man

b) Profession (specify)

c)

Student

d)

Others (specify)

Q4) Specify your INCOME level: a) Below 1lacs c) 3lacs – 5 lacs
Q5) Have you invested in ULIP? a) Yes b) No

b) 1lac – 3 lacs

d) Above 5 lacs

If Yes please specify the name of the Insurance Company

If No, would you like to invest in ULIP future? a)yes b) No

RISK-RETURN TRADE OFF Rate the following on the basis of your preference on a scale of 1 to 7 Agree 1 Q6) The returns associated with ULIP are high Q7) The costs associated with ULIP are high Q8) The risk component is predominant in ULIP as compared to the insurance component Q9) The recessionary conditions of the economy have increased the risks associated with ULIP 2 3 4 Disagree 5 6 7

ULIP A BETTER OPTION Rate the following on the basis of your preference for investment in ULIP on a scale of 1 to 7 L Low 1 Q10) The Liquidity of ULIP Q11) Capital Appreciation resulting from investment in ULIP Q12) Inflation Protection offered by ULIP 2 3 4 5 6 High 7

AGE DETERMINES THE INVESTMENT DECISION Rate the following on the basis of your preference on a scale of 1 to 7 Agree 1 Q 13) Age directly influences the decision to investment in ULIP Q14) ULIP is not popular among the older Population (above 55 years of Age) Q15) ULIP cannot be relied upon for social Security protection for the age 2 3 4 5 Disagree 6 7

(particularly above 55 years of age)

Q16) ULIP holders mostly belong to the age group of:

a)

Below 20

b) 20-30 d) 40-55

c) 30-40 e) Above 55

THE CHOICE OF INSURER Rate the following statements on the basis of Your preference for the insurance company: Agree Q17)The premium charged is more reasonable 1 Metlife Bajaj Allianz Om Kotak Mahindra Life ICICI prudential 2 3 4 5 6 7 Disagree

Q18)Their products offer greater flexibilty Agree 1 Metlife Bajaj Allianz Om Kotak Mahindra Life ICICI prudential 2 3 4 5 Disagree 6 7

Agree Q19)They offer greater number of funds 1 Metlife Bajaj Allianz Om Kotak Mahindra Life ICICI prudential 2 3 4 5 6

Disagree

7

Q20) There is greater transparency Agree 1 Metlife Bajaj Allianz Om Kotak Mahindra Life ICICI prudential 2 3 4 5 Disagree 6 7

CHAPTER 10 BIBLIOGRAPHY

WEB SITES:    www.metlife.co.in www.metlife.com www.irdaindia.gov www.indianinsuranceresearch.com

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www.bimaonline.com



www.bimadeals.com

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www.thefinancialexpress.mht

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outlookmoney_com-the false selling promises.mht (May 2, 2007)



Artani online Investments

       

www.personalfn.com Unit Linked Insurance Plan - 1971.mht Indian Express Finance ('ULIPs are suitable for all customers') Yahoo India Finance www.rgicl.com www.ipruniverse.com www.irdaindia.org www.indiacore.com

MAGAZINES:    INSURANCE PLUS BUSINESS INDIA ECONOMIC TIMES MATERIAL PROVIDED BY THE COMPANY



SURVEY

SEARCH ENGINES:-

  

www.google.com www.yahoo.com www.altavista.com

BOOKS :   Marketing management by Philip Kotler Insurance Advisor kit of Met Life Yojna (Magazine)