Insurance as an Investment
Content
“ROLE OF LIFE INSURANCE AS AN INVESTMENT”
IN
Submitted in the partial fulfillment of the requirement for the degree of (MASTER OF BUSINESS ADMINISTRATION)
PROJECT GUIDE
SUBMITTED BY
CERTIFICATE
It is certified that Project Report entitled “ROLE OF LIFE INSURANCE AS AN INVESTMENT” has been completed by Gurpreet singh in the partial fulfillment for the degree in Master of Business Administration under my supervision and guideance.The Work speaks about the sincere efforts of the candidate and I think it is quite satisfactory and should be accepted for evaluation.
Date…………….
PREFACE
Aviva Life Insurance was an obvious for my project. Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 40 million-customer base worldwide. It has more than £364 billion of assets under management. My basic idea was to known as much I can in the stipulated time period. The project is ‘ROLE OF LIFE INSURANCE AS AN INVESTMENT. This project is a part of our two-year degree course of Master of Business Administration. M.B.A. course imparts the students with virtues & prepare them to take business world in their stride. In the final lap of course, Summer Training Project Report prepares student to face the actual business environment & gives them practical experience & helps them to view the real business world closely, which in turn widely influence their conception & perception. The project assigned to us required a lot of extensive study, as we had to research the ‘ROLE OF LIFE INSURANCE AS AN INVESTMENT. It gives us a great deal to exposure to work environment, which will be very helpful for our future.
ACKNOWLEDGEMENT
It is difficult to acknowledge precious a debt as that of learning as it is the only debt that is difficult to repay except through gratitude. First and foremost I wish to express my profound gratitude to the almighty, the merciful and compassionate with whose grace and blessing I have been able to complete my work. Thanks all my friends who have guided me and stood by me throughout.
CONTENTS
•Objectives of the study •Research Methodology •History of Insurance •IRDA •Company profile •Products of company •Benefits of investing with Aviva •Customer satisfaction •Market Share •Data analysis & interpretation •Conclusion •Suggestion •Limitation • Bibliography • Annexure
OBJECTIVES
To know the general views of people about life insurance To know the position of AVIVA life insurance in the market To know, whether life insurance is an investment or not?
RESERCH METHODOLOGY
A research methodology is a sample frame work or plan for a study that is used as a guide for conducting research. RESEARCH DESIGN It is the blueprint of the research to be conducted. Research design used in the study: - Descriptive research It is the research in which the already existing facts are studied in the way they exist.
DATA SOURCE: Primary data – Questionnaire & interviews Secondary data – internet, Magazine and company literature available. SAMPLING PLAN Sampling unit – AVIVA Life Insurance Sampling size - 100 Sampling procedure – convenience sampling Research area - Ludhiana
Brief History of Insurance
The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was
the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,
What is insurance?
We face a lot of risks in our daily lives. Some of these lead to financial losses. Insurance is a way of protecting against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.
Classification of Insurance
Life is full of uncertainty. Trials and tribulations abound in each and every aspect of life. No one can truly predict or even estimate what the future has in store for him. Life offers no guarantees by itself, except the incidences of death and taxation. This lack of security present throughout life can be overcome partially through insurance. Insurance can never replace or repair a loss. But the monetary value offered by insurance helps in adjusting to the new circumstances. Despite offering innumerable options and immense scope, insurance can be classified into four main categories.
• • •
Insurance of Person Insurance of Property Insurance of Interest
•
Insurance of Liability
Insurance of Person: Under the purview of this class of insurance, the risks associated with human life in general can be covered up to the limit specified. A person can insure his or her life and his health against any unplanned contingencies. In event of his death, his dependants will be reimbursed to the full amount that he was insured for. Or if the insured person meets with an accident or suffers from an illness that cripples him forever, he will be compensated with the complete sum assured anyway since he may not be able to lead a normal life again. In case, the accident is not that severe, he should be able to recover after medical treatment and rehabilitation. If he has opted for medical cover, then his medical expenses, treatment and medication will be paid for by his insurance policy. | Insurance of Property: Everyone possesses material value in the form of tangible assets. Assets can be in the form of a landed estate or a vehicle, share holdings or plain old paper money. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery. An individual's lifetime of hard work can be wiped out in a blink of an eye. But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained. Insurance of Interest: Every individual has to discharge certain specific duties. Everyone is expected to maintain a standard of conduct. But then, it is an intrinsic part of human nature to err. No one is infallible and no one will ever be. Owing to an occasional error or omission committed by us, our clients or customers might suffer a loss. In turn we might have to pay them damages or compensation out of our own personal resources.
However, if our chosen profession qualifies for insurance of interest, then our insurance policy will more than suffice in arranging for the funds and court formalities that might ensue in the aftermath of legal libel.
Insurance of Liability: Every person has to regulate his actions and behaviour so as not to cause injury or damage to other people and their property. Everyone is personally responsible and liable for his actions. If due to lack of control over his actions or prejudiced behaviour, a person incurs any liability then he has to provide compensation out of his personal resources. Liabilities: legal, civil or criminal can have severe repercussions on social standing and prestige besides the financial status. By investing in liability insurance, an individual can ward off any liabilities he might incur due to his actions and behaviour. Besides, the premiums payable on liability insurance are fairly minimal when compared to the damages that have to be compensated in the long run.
IRDA: - INSURANCE
REGULATORY AND DEVELOPMENT AUTHORITY (The Authority) was
established by an Act of Parliament-Insurance Regulatory & Development Authority Act, 1999 (ACT)- and was constituted on April 19, 2000 by a notification issued in the Gazette of India. The Authority was established with a view to protect the interests of the holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. The Authority, in terms of section 13 of Insurance Regulatory and Development Authority Act, 1999 [Act], has been vested with the assets and liabilities of the Interim Insurance Regulatory Authority as are available on the appointed day i.e. April 19, 2000. In terms of section 16 of the Act a fund shall be constituted namely ‘The Insurance Regulatory and Development Authority Fund” [Fund]. The Fund shall constitute of all Government grants, fees and charges received by the Authority, all sums received by the Authority from such other source as may be decided upon by the Central government and the percentage of prescribed premium income received from the insurer. The Fund shall be applied for meeting the salaries, allowances and other remuneration of the members, officers and other employees of the Authorityand the other expenses of the Authority in connection with discharge of its functions and for the purpose of the Act.
DUTIES, POWERS AND FUNCTIONS OF IRDA
Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA.. (1)Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2)Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, (a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) specifying the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; (f) promoting and regulating professional organizations connected with the
insurance and re-insurance business; (g) levying fees and other charges for carrying out the purposes of this Act; (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business; (i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) regulating investment of funds by insurance companies; (l) regulating maintenance of margin of solvency; (m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f); (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed
AVIVA LIFE INSURANCE COMPANY PVT.LTD. : INTRODUCTION
Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 40 million-customer base worldwide. It has more than £364 billion of assets under management. In India, Aviva has a long history dating back to 1834. At the time of nationalization it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in 1995. In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products. In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. With a strong sales force of over 28,000 Financial Planning Advisers (FPAs), Aviva has initiated an innovative and differentiated sales approach to the business. Through the “Financial Health Check” (FHC) Aviva’s sales force has been able to establish its credibility in the market. The FHC is a free service administered by the FPAs for a need-based analysis of the customer’s long-term savings and insurance needs. Depending on the life stage and earnings of the customer, the FHC assesses and recommends the right insurance product for them. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and Maharashtra and regional Banks. When Aviva entered the market, most companies were offering traditional life products. Aviva started by offering the more modern Unit Linked and Unitised With Profit products to the customers, creating a unique differentiation. Aviva’s products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked products in the market. Its products include: whole life (LifeLong), endowment (LifeSaver, EasyLife Plus), child
policy (Young Achiever) single premium (LifeBond and LifeBond Plus), Pension (PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals. Aviva’s Fund management operation is one of its key differentiators. Operating from Mumbai, Aviva has an experienced team of fund managers and the range of fund options includes Unitised With-Profits Fund and four Unit Linked funds: - Protector Fund, Secure Fund, Balanced Fund and Growth Fund. Aviva has 156 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in close to 500 towns and cities across India. Aviva is also keen to reach out to the underprivileged that have not had access to insurance so far. Through its association with Basix (a micro financial institution) and other NGOs, it has been able to reach the weaker sections of the society and provide life insurance to them.
DABUR
Founded in 1884, Dabur is one of India's oldest and largest group of companies with consolidated annual turnover in excess of Rs 1,899 crores. A professionally managed company, it is the country's leading producer of traditional healthcare products.
Partners
At Aviva we are committed to helping our customers get 'Kal par Control' and make the most out of their lives. It is our constant endeavour to ensure that our customers have easy access to Aviva products and services at all times.
Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private and nationalized Banks in the country. Aviva also focuses on bancassurance worldwide and has a proven track record of successful bancassurance relationships. It has 40 major partnerships with leading banks across the globe. Aviva is a leading bancassurer in countries such as France, Italy, Spain, Australia and New Zealand.
ABN AMRO Bank
ABN AMRO is a prominent international bank with European roots and a clear focus on consumer and commercial banking gaining a competitive edge on the chosen markets and client segments. ABN AMRO Bank (India) ventured into the Indian market in 1920 primarily to finance the diamond trading business and evolved by mid 1990’s into a fastest growing retail bank and a well-respected wholesale bank. The Bank is recognized as one of the most successful consumer banking outfits in the county, known for its innovation and aggression. ABN India consumer banking pioneered the distribution of third party financial products like mutual funds, bonds and life insurance. Aviva's relationship with ABN India commenced in June 2002 under which the bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 21 branches at 14 locations.
American Express Bank
American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is the world’s largest single card issuer, based on purchase volume generated of nearly 55 million cards worldwide. Present in India since 1921, American Express provides high quality travel related and financial services in India.
Aviva Life Insurance entered into a strategic alliance with American Express for distribution of Life Insurance in June 2002 to offer top-of the line savingcum-protection plans to Amex bank and card customers. Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth Management channel. The retail card segment is being tapped through outbound calling to the Amex card holders. The American Express Inbound call centre also pitches Aviva products to its callers.
The Lakshmi Vilas Bank Ltd The Lakshmi Vilas Bank Ltd, based out of Karur, is among the top private banks in India. It has 221 branches with a customer base of 1.2 million, across 10 states. Currently Aviva products are sold across 204 branches of LVB. CANARA BANK Canara Bank is one of the largest retail banks in India with 2,513 branches spread across 25 States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank branches in 103 Cities.
Punjab & Sind Bank Punjab & Sind Bank was established in the year 1908. Based on the principles of social commitment to the people, help the farmers, and the weaker sections of the society to raise their standard of living and play a significant role in the development of the country. Even after 96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its founding fathers. Punjab
and Sindh Bank has a network of 759 branches and 132 extension counters all over the country with close to 9,765 employees. 42 per cent of its branches are in the rural and semi urban areas. In line with spirit of liberalisation the Bank has laid special emphasis on International banking, Hire purchase, Leasing, Tele-banking and Credit card facilities. The bank has also started their Rural Development Division, High Tech Agricultural Branches, Specialised Locker Branches, Industrial Finance and SSI branches, besides Housing Finance Branch for the convenience of its customers. Centurion Bank of Punjab Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail and corporate banking products and services. It holds leadership positions in retail two-wheeler loans and commercial vehicle loans. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service. RBI has approved the merger between Centurion Bank and Bank of Punjab effective from October 1st, 2005. The merged entity, named Centurion Bank of Punjab, has a strong nationwide franchise of 241 branches and extension counters and 389 ATMs. With strengths in the retail, SME and agriculture businesses the bank is well poised to capture the opportunities that exist in the Indian market. The combined bank’s 3,500 employees will continue to provide support and an enhanced banking experience to our customers, as part of a bigger, stronger bank. IndusInd Bank IndusInd Bank Ltd., is one of the leading new-generation private-sector banks in India, commenced operations in 1994 and had a net worth of Rs.866 crore as at March 31, 2006. As of date, the Bank has a network of 148 branches and 87 offsite ATMs spread over 118 geographical locations in 24 states and Union Territories. Recently the Bank received licenses for opening 19 new branches across the country. With this the network will now increase to 180 branches by MarchApril 2007. Internationally, the Bank has a representative office each in Dubai and London. The Bank also enjoys strategic alliances with Union National
Bank, Abu Dhabi in the UAE and Doha Bank in Qatar. These strategic alliances encompass a wide range of banking services, including deposit accounts, remittance business, loans, wealth management advisory, distribution of third party products, trade finance, global banking, and investment banking including corporate finance.
PRODUCTS & SERVICES
The right investment strategies won't just help you plan for a more comfortable tomorrow -- they will help you get Kal Par Control. At Aviva, life insurance plans are created keeping in mind the changing needs of you and your family. Our life insurance plans are designed to provide you with flexible options that meet both protection and savings needs. We offer our customers a full range of transparent, flexible and value for money products that include whole life (LifeLong), endowment (LifeSaver, EasyLife Plus), child policy (Young Achiever) single premium (LifeBond, LifeBond Plus), Pension (PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and a 5 year recurring premium investment cum protection plan (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals. We also offer you a choice of investment options. You can choose between our Unit Linked Fund or our With Profits Fund. The With Profits Fund guarantees that the selling price of the units will never fall. The unit value of this fund is increased by crediting bonuses on a daily compounding basis. The fund provides investment security to your capital. The Unit Linked Fund is designed to provide relatively more progressive capital growth wherein you automatically receive the benefit related to the investment performance of the fund. Under Unit Linked Fund, on some of our products we offer a choice of fund options:
Protector Fund:
Progressive returns on your investment by investing higher element of assets in debt securities, with minimum exposure to equities. The fund comprises of debt securities in the range of 60-100%, equities in the range of 0-20% and money market and cash in the range of 0-20%.
Secure Fund:
The investment objective of this fund is to provide progressive return on your investment with a minimum guarantee on maturity. The fund comprises of debt securities in the range of 50-100%, equities in the range of 020% and money market and cash in the range of 0-20%. Initially the equity exposure will be 10 %.
Growth Fund:
The investment objective of this fund is to provide high capital growth by investing higher element of assets in the equity market. The fund will comprise of debt securities in the range of 0-50%, equities in the range of 0-85% and money market and cash in the range of 0-20%. Initially the equity exposure will be 75%.
Balanced Fund:
The investment objective of this fund is to provide capital growth by availing opportunities in debt and equity markets and providing a good balance between risk and return. The fund comprises of debt securities in the range of 50-90%, equities in the range of 0-45% and money market and cash in the range of 0-10%. Aviva also offers a whole range of group insurance products and corporate solutions. We have a dedicated team that works with corporates across the country.
PURE PROTECTION PRODUCTS
Aviva Life Insurance offer the following policies to take care of our protection needs• Life Long • Life Shield
LIFE LONG
LifeLong is designed to suit your individual requirements, no matter which life stage you are at, and changes as your needs change during your entire life. For the same premium, you can opt for a higher life cover (protection) and lower savings or lower life cover and higher savings. The choice of protection-savings mix is yours, and the decision can be based on your priorities and age. You can also cover your spouse under the same policy without any additional expense through a joint life policy (first death basis). LifeLong offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
LIFESHIELD
Insurance Term Pure LifeShield is a low cost life insurance plan which guarantees to pay a lump sum amount in case of your death during the term of the policy. LifeShield can be purchased for any life between 18 to 55 years of age. However, the maximum age of the life insured at expiry of the policy is 65 years. The minimum and maximum policy terms are 5 years and 40 years, respectively. The minimum annual premium is Rs.2,000 and the minimum sum insured is Rs.500,000. The sum insured of the policy can be increased (only upto 40 years of age) once by 50% (subject to maximum increase of Rs.1,000,000) during the term of the policy, without submitting any evidence of good health, if: - You decide to increase the sum insured within three months of your marriage. - You decide to increase the sum insured within three months of the birth of your child.
This option to increase the sum insured is available if the policy has been accepted on standard rates. It can be exercised only when outstanding term of the policy is at least 5 years and the policy is inforce for full sum insured
PURE SAVINGS PRODUCTS
Aviva Life Insurance offer the following savings policies• • • • • • • • • • • • Easy Life Plus Young Achiever Life Bond 5 Life Bond Life Saver Life Long Pension Plus Save Guard Life Bond Plus Save Guard Junior Life saver Plus Freedom Life Plan
• Easy Life Plus
EasyLife Plus is a simple, unit-linked endowment plan with the benefit of life protection. By choosing an appropriate premium level and term, you can match the maturity date of the plan to a specific savings need such as your child’s education, wedding or any other financial need. EasyLife Plus also offers an extra protection against accident without requiring you to undergo any medical examinations. EasyLife Plus offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit
Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Young Achiever Child policy YoungAchiever is a regular premium life insurance product designed to meet the financial needs of your children- be it higher education, marriage, establishing themselves while starting a career or a business, or any other need. Through this policy, you save regularly to meet your children's needs, and at the same time their financial needs are taken care of should something unfortunate happen to you. YoungAchiever can be purchased on the life of any one of the parents with the child as the nominee. YoungAchiever offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Life Bond LifeBond 5 is an investment plan where you pay premiums only for 5 years and get investment returns with maximum tax benefits. This unit-linked plan gives you the flexibility that you, as a smart investor, seek both at the time of investment and at maturity. LifeBond 5 offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%. LifeBond is a unit linked, Single Premium Whole Life plan, designed to provide you the maximum benefit of investment returns and tax benefits. You can gift LifeBond to your newborn and provide financial security when he/ she needs it. Also, you can cover your spouse under the same policy without any additional expense through a joint life policy (second death basis). LifeBond offers a With Profits Fund and 3 unit linked funds, which give you the flexibility of choosing how your money should be invested in terms of risk and security of return on investment.
• Life saver Life Saver is a unit linked endowment plan designed to meet your specific longterm savings needs such as education and wedding costs for your children, with the added reassurance of a life cover to meet those costs in the unfortunate event of your death before the policy matures. You can take LifeSaver on single life or jointly with your spouse (first death basis). LifeSaver can be purchased on any life between 18 to 65 years. However, for any rider cover the maximum entry age is 55 years. LifeSaver offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Pension plus Pension Plus is a tax efficient, personal pension plan that is designed to help you earn a regular income, even after you stop working. Through this plan, you build a fund till you retire which provides you financial security after retirement. Pension Plus can be purchased for any life between 18 to 65 years of age. The minimum age at maturity is 40 years and the maximum age at maturity is 70 years. You have the option of either paying regular premiums or paying a single premium. The minimum annual premium is Rs. 6,000 for regular premium and Rs 1,00,000 for a single premium option. The minimum policy term is 5 years. A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.
• Save Guard SaveGuard is a simplified, unit-linked endowment plan. It is specially designed to help you save for important milestones like your child’s education and marriage, building a house or even creating a retirement fund. It also provides financial protection for your dependants in the unfortunate event of your
demise. SaveGuard offers life insurance as well as an investment opportunity without requiring you to undergo any medical examinations. SaveGuard offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%.
• Life Bond plus
LifeBond Plus is a unit linked, Single Premium Endowment plan, designed to provide you the maximum benefit of investment returns and tax benefits.The entry age is 18 to 65 years (last birthday) and in case rider is opted, the maximum entry age is 55 years. The policy terms is 5 to 25 years (maximum age at maturity 70 years).A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds. • SaveGuard Junior SaveGuard Junior is a simplified, unit-linked endowment plan, which covers your child’s life. It is specially designed to help you save for important milestones in your child’s life like education, setting up a business or marriage. SaveGuard Junior offers an investment opportunity as well as life insurance without requiring you to undergo any medical examinations. SaveGuard Junior offers entry ages from 0 to 17 years, a choice of policy terms, from 10 to 30 years as well as an option of investing in any or a combination of 3 unit-linked funds. SaveGuard Junior also offers a guarantee that the units invested in the Secure Fund will not be less than the price they were bought at plus 3% interest compounded annually. LifeSaver Plus is a Unit Linked endowment plan designed to meet your future savings requirements besides offering a higher life cover. The plan offers full Sum Assured in addition to the Fund Value as death benefit in case of your unfortunate death, thereby providing a higher financial protection to your family. You can also opt for the “Systematic Transfer Plan”. The plan provides a guaranteed addition at maturity. In addition, the Plan offers a minimum guarantee on maturity on the funds allocated towards the Secure
Fund. • LifeSaver Plus LifeSaver Plus can be purchased for any age between 0 to 60 years. However, in case any rider is opted for the maximum entry age is 55 years. You can also choose the premium payment term separately from the policy term so that you can match your paying capacity to your financial goals. You have the freedom of choosing from 4 Unit Linked Funds: Protector, Secure, Growth and Balanced Funds and the option of investing through the Systematic Transfer Plan. In addition, you get a minimum 2% Guaranteed Addition at maturity and have the choice of increasing or decreasing your premium amount whenever you like. • Freedom Life Plan Freedom LifePlan is a unit-linked limited premium paying endowment plan with guaranteed loyalty additions. This unit linked plan gives you the flexibility to customise the plan to suit your individual needs and alter it subsequently with your changing needs. You can take Freedom LifePlan on single life or jointly with your spouse (first death basis). Freedom LifePlan offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%.
The pension plan market in India currently constitute 8 players who offers 18 products
Sl. No.
Minimum Name of the Plan Entry Age Sum Assured Term
Max Maturity Age
Mode of Payment
Life Insurance Corporation 1. 2. 3. Jeevan Dhara - Plan No.96 Jeevan Akshay - Plan No.97 Jeevan Suraksha - Plan No.122 New Jeevan Akshay - Plan No.144 New Jeevan Dhara - Plan No.145 Bima Nivesh 2001-Plan No.141 ICICI Pru Forever Life ICICI PruReAssure ICICI Pru ForeverLife (Deferred Pension) ICICI Pru LifeLink Pension ICICI Pru Lifetime 18 30 25 Rs. 20,000 Rs. 100 2 5 No 70 Yrs Yearly, half yearly One time Yearly, half yearly, quarterly, monthly One Time Yearly, half yearly, quarterly, monthly Single Premium One time Yearly, half yearly, quarterly, monthly Yearly, Half Yearly, Quarterly, Monthly Yearly, half yearly
4.
30
Rs, 1,000
-
None
5.
12
Rs. 20,000
NA
75 Yrs
6. ICICI 7. 8. 9. 10. 11. HDFC 12.
35
Rs.25,000
5
75 Yrs
18 7 8 18 0
Rs 50000 Rs 50,000 Rs.50000 -
5 5 5 3 10
65 65 70 70
HDFC Pension Plan
18
-
10
70
Tata AIG Life Insurance 13. 14. 15. 16. Assured Golden Years Plan Nirvana - Pension Plan Kotak Capital Multiplier Plan Pension Plan Easy Life Retirement (Participating) Plan 18 18 18 Rs. 25,000 10 5 5 60 65 70
Om Kotak Mahindra Aviva India Life Insurance Max New York Life 17. 20 10 70
BENEFITS OF INVESTING WITH AVIVA
Tax benefits Tax benefits as per the prevailing provisions of the income Ta Act, 1961
Choice of investment options You can choose between the unit linked fund or the with profits fund: Unit linked funds are designed to provide relatively more progressive capital growth wherein you automatically receive the benefits related to the investment performance of the fund. Unit linked fund offers three investment fund option which gives you the flexible of choosing how your money should be invested in terms of the risk the and the security of the return on the investment: Secure fundThe investment objective of this fund is to provide progressive return on your investment with a capital guarantee on maturity. Growth fundThe investment objective of this fund is to provide high capital growth by investing higher element of assets in the equity market. Balance fundThe investment objective of this fund is to provide capital growth by availing opportunities in debt and equity markets and provides you a good balance between risk and return. Indexation To protect against inflation, indexation offers the option of increasing the premium and the sum insured so that you get a meaningful Amount on maturity. Partial With drawls Option for partial withdrawals from your fund whenever you need. Additional Single Premium Flexibility of making lump sum investments as often as you require over the duration of the policy. These increase the saving value of your policy besides maximizing tax benefits.
Cover Level Cover level is a multiple of annual premium used to calculate the sum insured. You have the flexibility of choosing your own cover level, depending upon your needs.
CUSTOMERS STISFACTION
Fair treatment of customers is, fundamentally, good business practice and is key to securing customers confidence in financial services. All our businesses are focused on that goal.
As the world’s fifth largest insurer and one of Europe’s leading providers of life and pensions products,Aviva as committed to ensuring open and transparent relationship with our customers, we also seek to mind or our customers at every of their lives. Although we have yet to introduce one overarching customer policy to support or diverse activities, the standards of business conduct policy does provide minimum standards for the Aviva business to follow in seeking to provide our customer with a service hallmarked by integrity, quality and care. Business throughout Aviva are also committed to managing service levels offered to customers and are continually seeking new and improved ways of providing better customer service.
Market Share of different insurance company
As awareness about AVIVA life insurance Company among rural people is very less than other company that is the reason of less market share of AVIVA.
DATAANALYSIS
&
INTERPRETATIONS
Q.1 Which age group do you belong to?
Age < 25 years 26-35 years 36-45 years 46-55 years 55 years or more
No of People 6 25 40 19 10
40
Q.2 The income class scenario of sample size.
Income class (in Rs.) Business Class Service Class In % 63 37
35 30 25
63% of people was from business class, major people was able to understand the things more precisely as businessmen are more conscious about any investment plan.
Q.3 What is your income level?
Annual Income Less than Rs. 600000 Rs. 600000 to 1.5 lakhs Rs. 1.5 to 2.5 lakhs More than Rs. 2.5 lakhs TOTAL
No. of people 30 22 35 13 100
52% people belongs to income level less than 1.5 lakh and rest more than 1.5 lakh.
13
Q.4 From which sources have you get awareness about insurance?
AWARNESS ABOUT INSURANCE News Paper TV Radio Agents Friends
NO. OF PEOPLE 20 35 12 25 8
As TV becomes the most entertaining visual media, that why people get early information through TV and in case of insurance, agent play very important role in case of information.
40 35
Q.5 What are the main considerations while investment in insurance?
30 25
MAIN CONSIDERATION
NO. OF PEOPLE
Tax Saving & Investment Protection Pension TOTAL
36 16 34 14 100
Most of people investing in life insurance for Tax benefits and the second thing of their consideration is protection. Some people investing in insurance for pension scheme that’s why only 14% are considering insurance for pension.
40
36
Q.6 WHICH BRAND WILL YOU PREFER? Brand ICICI Prudential AVIVA Life Insurance HDFC Standard Life LIC TOTAL PERCENTAGE 14 13 8 65 100
70% 60%
LIC is govt. sector player; therefore people have more faith on LIC. In case of private player ICICI Prudential has largest network that’s why 14% people are giving importance to ICICI and 13% to AVIVA.
50% 40% 30%
Q.7 Which private player you know more? PRIVATE PLAYER ICICI Prudential AVIVA Life Insurance HDFC Standard Life BAJAJ Allianz Birla Sun Life TOTAL PERCENTAGE 45 21 25 6 3 100
In case of private player ICICI Prudential has largest network that’s why 45% people are aware with the brand ICICI, 24% to AVIVA and 25 % to HDFC standard life.
45 45 40
Q.8 Do you think that life insurance is a good investment? Yes No 90% 10%
As we have seen earlier, in present business scenario peoples are taking insurance as an investment opportunity rather than safety. Therefore 90% gave preference towards investment option.
Conclusion
I have conclude that in present market scenario the main focus of peoples are not only on safety & security but also on the better return. Therefore, we can say that insurance also act as investment opportunity because of Tax benefits, good return and security of life. These are the basic reason, which shows that people become more conscious about return and security of money than life insurance factor. This is the cause of growing of insurance sector in geometric form.
SUGGESTION
After analyzing the whole project, I would like to give few suggestion to company to increase their market area. These facts are:
Company must have to focus on advertisement to aware customers regarding Aviv’s products.
Since peoples are focusing on good return so company must have to give preference on those products. Company must also focus on rural area to increase market share.
Company must has to focus on relationship strategy to retain the old customer and create new customer.
LIMITATON
• There was lack of time on the part of respondents. • There may be some bias information provide by company professionals. • As only single city surveyed, it does not represent the overall view of Indian market. • Some of the respondents may give the incorrect information.
BIBLIOIGRAPHY Research Methodology – Kothari Marketing Management- Philip Kotler WEBSITES http://www.answers.com http://www.wikipedia.com http://www.Avivalifeinsurance.com
• • •
Annexure
Q.1 Which age group do you belong to?
Age < 25 years 26-35 years 36-45 years 46-55 years 55 years or more Q.2 The income class scenario of sample size. Income class (in Rs.) Business Class Service Class
Q.3 What is your income level? Annual Income Less than Rs. 600000 Rs. 600000 to 1.5 lakhs Rs. 1.5 to 2.5 lakhs More than Rs. 2.5 lakhs TOTAL Q.4 From which sources have you get awareness about insurance? AWARNESS ABOUT INSURANCE News Paper TV Radio Agents Friends
Q.5 What are the main considerations while investment in insurance?
MAIN CONSIDERATION
Tax Saving & Investment Protection Pension TOTAL
Q.6 WHICH BRAND WILL YOU PREFER? Brand ICICI Prudential AVIVA Life Insurance HDFC Standard Life LIC TOTAL Q.7 Which private player you know more? PRIVATE PLAYER ICICI Prudential AVIVA Life Insurance HDFC Standard Life BAJAJ Allianz Birla Sun Life TOTAL
Q.8 Do you think that life insurance is a good investment? Yes No
IN
Submitted in the partial fulfillment of the requirement for the degree of (MASTER OF BUSINESS ADMINISTRATION)
PROJECT GUIDE
SUBMITTED BY
CERTIFICATE
It is certified that Project Report entitled “ROLE OF LIFE INSURANCE AS AN INVESTMENT” has been completed by Gurpreet singh in the partial fulfillment for the degree in Master of Business Administration under my supervision and guideance.The Work speaks about the sincere efforts of the candidate and I think it is quite satisfactory and should be accepted for evaluation.
Date…………….
PREFACE
Aviva Life Insurance was an obvious for my project. Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 40 million-customer base worldwide. It has more than £364 billion of assets under management. My basic idea was to known as much I can in the stipulated time period. The project is ‘ROLE OF LIFE INSURANCE AS AN INVESTMENT. This project is a part of our two-year degree course of Master of Business Administration. M.B.A. course imparts the students with virtues & prepare them to take business world in their stride. In the final lap of course, Summer Training Project Report prepares student to face the actual business environment & gives them practical experience & helps them to view the real business world closely, which in turn widely influence their conception & perception. The project assigned to us required a lot of extensive study, as we had to research the ‘ROLE OF LIFE INSURANCE AS AN INVESTMENT. It gives us a great deal to exposure to work environment, which will be very helpful for our future.
ACKNOWLEDGEMENT
It is difficult to acknowledge precious a debt as that of learning as it is the only debt that is difficult to repay except through gratitude. First and foremost I wish to express my profound gratitude to the almighty, the merciful and compassionate with whose grace and blessing I have been able to complete my work. Thanks all my friends who have guided me and stood by me throughout.
CONTENTS
•Objectives of the study •Research Methodology •History of Insurance •IRDA •Company profile •Products of company •Benefits of investing with Aviva •Customer satisfaction •Market Share •Data analysis & interpretation •Conclusion •Suggestion •Limitation • Bibliography • Annexure
OBJECTIVES
To know the general views of people about life insurance To know the position of AVIVA life insurance in the market To know, whether life insurance is an investment or not?
RESERCH METHODOLOGY
A research methodology is a sample frame work or plan for a study that is used as a guide for conducting research. RESEARCH DESIGN It is the blueprint of the research to be conducted. Research design used in the study: - Descriptive research It is the research in which the already existing facts are studied in the way they exist.
DATA SOURCE: Primary data – Questionnaire & interviews Secondary data – internet, Magazine and company literature available. SAMPLING PLAN Sampling unit – AVIVA Life Insurance Sampling size - 100 Sampling procedure – convenience sampling Research area - Ludhiana
Brief History of Insurance
The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were being treated as sub-standard lives and heavy extra premiums were being charged on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912 India had no legislation to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian companies on many accounts, putting the Indian companies at a disadvantage. The first two decades of the twentieth century saw lot of growth in insurance business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies many financially unsound concerns were also floated which failed miserably. The Insurance Act 1938 was
the first legislation governing not only life insurance but also non-life insurance to provide strict state control over insurance business. The demand for nationalization of life insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However, it was much later on the 19th of January, 1956, that life insurance in India was nationalized. About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were operating in India at the time of nationalization. Nationalization was accomplished in two stages; initially the management of the companies was taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September,
What is insurance?
We face a lot of risks in our daily lives. Some of these lead to financial losses. Insurance is a way of protecting against these financial losses. For a payment (premium), an insurance company will take the responsibility of compensating your financial losses.
Classification of Insurance
Life is full of uncertainty. Trials and tribulations abound in each and every aspect of life. No one can truly predict or even estimate what the future has in store for him. Life offers no guarantees by itself, except the incidences of death and taxation. This lack of security present throughout life can be overcome partially through insurance. Insurance can never replace or repair a loss. But the monetary value offered by insurance helps in adjusting to the new circumstances. Despite offering innumerable options and immense scope, insurance can be classified into four main categories.
• • •
Insurance of Person Insurance of Property Insurance of Interest
•
Insurance of Liability
Insurance of Person: Under the purview of this class of insurance, the risks associated with human life in general can be covered up to the limit specified. A person can insure his or her life and his health against any unplanned contingencies. In event of his death, his dependants will be reimbursed to the full amount that he was insured for. Or if the insured person meets with an accident or suffers from an illness that cripples him forever, he will be compensated with the complete sum assured anyway since he may not be able to lead a normal life again. In case, the accident is not that severe, he should be able to recover after medical treatment and rehabilitation. If he has opted for medical cover, then his medical expenses, treatment and medication will be paid for by his insurance policy. | Insurance of Property: Everyone possesses material value in the form of tangible assets. Assets can be in the form of a landed estate or a vehicle, share holdings or plain old paper money. Since tangible property has a physical shape and consistency, it is subject to many risks ranging from fire, allied perils to theft and robbery. An individual's lifetime of hard work can be wiped out in a blink of an eye. But if a person judiciously invests in insurance for his property prior to any unexpected contingency then he will be suitably compensated for his loss as soon as the extent of damage is ascertained. Insurance of Interest: Every individual has to discharge certain specific duties. Everyone is expected to maintain a standard of conduct. But then, it is an intrinsic part of human nature to err. No one is infallible and no one will ever be. Owing to an occasional error or omission committed by us, our clients or customers might suffer a loss. In turn we might have to pay them damages or compensation out of our own personal resources.
However, if our chosen profession qualifies for insurance of interest, then our insurance policy will more than suffice in arranging for the funds and court formalities that might ensue in the aftermath of legal libel.
Insurance of Liability: Every person has to regulate his actions and behaviour so as not to cause injury or damage to other people and their property. Everyone is personally responsible and liable for his actions. If due to lack of control over his actions or prejudiced behaviour, a person incurs any liability then he has to provide compensation out of his personal resources. Liabilities: legal, civil or criminal can have severe repercussions on social standing and prestige besides the financial status. By investing in liability insurance, an individual can ward off any liabilities he might incur due to his actions and behaviour. Besides, the premiums payable on liability insurance are fairly minimal when compared to the damages that have to be compensated in the long run.
IRDA: - INSURANCE
REGULATORY AND DEVELOPMENT AUTHORITY (The Authority) was
established by an Act of Parliament-Insurance Regulatory & Development Authority Act, 1999 (ACT)- and was constituted on April 19, 2000 by a notification issued in the Gazette of India. The Authority was established with a view to protect the interests of the holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. The Authority, in terms of section 13 of Insurance Regulatory and Development Authority Act, 1999 [Act], has been vested with the assets and liabilities of the Interim Insurance Regulatory Authority as are available on the appointed day i.e. April 19, 2000. In terms of section 16 of the Act a fund shall be constituted namely ‘The Insurance Regulatory and Development Authority Fund” [Fund]. The Fund shall constitute of all Government grants, fees and charges received by the Authority, all sums received by the Authority from such other source as may be decided upon by the Central government and the percentage of prescribed premium income received from the insurer. The Fund shall be applied for meeting the salaries, allowances and other remuneration of the members, officers and other employees of the Authorityand the other expenses of the Authority in connection with discharge of its functions and for the purpose of the Act.
DUTIES, POWERS AND FUNCTIONS OF IRDA
Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA.. (1)Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2)Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, (a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; (c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) specifying the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; (f) promoting and regulating professional organizations connected with the
insurance and re-insurance business; (g) levying fees and other charges for carrying out the purposes of this Act; (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business; (i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) regulating investment of funds by insurance companies; (l) regulating maintenance of margin of solvency; (m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f); (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed
AVIVA LIFE INSURANCE COMPANY PVT.LTD. : INTRODUCTION
Aviva is UK’s largest and the world’s fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 40 million-customer base worldwide. It has more than £364 billion of assets under management. In India, Aviva has a long history dating back to 1834. At the time of nationalization it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in 1995. In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products. In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. With a strong sales force of over 28,000 Financial Planning Advisers (FPAs), Aviva has initiated an innovative and differentiated sales approach to the business. Through the “Financial Health Check” (FHC) Aviva’s sales force has been able to establish its credibility in the market. The FHC is a free service administered by the FPAs for a need-based analysis of the customer’s long-term savings and insurance needs. Depending on the life stage and earnings of the customer, the FHC assesses and recommends the right insurance product for them. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and Maharashtra and regional Banks. When Aviva entered the market, most companies were offering traditional life products. Aviva started by offering the more modern Unit Linked and Unitised With Profit products to the customers, creating a unique differentiation. Aviva’s products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked products in the market. Its products include: whole life (LifeLong), endowment (LifeSaver, EasyLife Plus), child
policy (Young Achiever) single premium (LifeBond and LifeBond Plus), Pension (PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals. Aviva’s Fund management operation is one of its key differentiators. Operating from Mumbai, Aviva has an experienced team of fund managers and the range of fund options includes Unitised With-Profits Fund and four Unit Linked funds: - Protector Fund, Secure Fund, Balanced Fund and Growth Fund. Aviva has 156 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in close to 500 towns and cities across India. Aviva is also keen to reach out to the underprivileged that have not had access to insurance so far. Through its association with Basix (a micro financial institution) and other NGOs, it has been able to reach the weaker sections of the society and provide life insurance to them.
DABUR
Founded in 1884, Dabur is one of India's oldest and largest group of companies with consolidated annual turnover in excess of Rs 1,899 crores. A professionally managed company, it is the country's leading producer of traditional healthcare products.
Partners
At Aviva we are committed to helping our customers get 'Kal par Control' and make the most out of their lives. It is our constant endeavour to ensure that our customers have easy access to Aviva products and services at all times.
Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private and nationalized Banks in the country. Aviva also focuses on bancassurance worldwide and has a proven track record of successful bancassurance relationships. It has 40 major partnerships with leading banks across the globe. Aviva is a leading bancassurer in countries such as France, Italy, Spain, Australia and New Zealand.
ABN AMRO Bank
ABN AMRO is a prominent international bank with European roots and a clear focus on consumer and commercial banking gaining a competitive edge on the chosen markets and client segments. ABN AMRO Bank (India) ventured into the Indian market in 1920 primarily to finance the diamond trading business and evolved by mid 1990’s into a fastest growing retail bank and a well-respected wholesale bank. The Bank is recognized as one of the most successful consumer banking outfits in the county, known for its innovation and aggression. ABN India consumer banking pioneered the distribution of third party financial products like mutual funds, bonds and life insurance. Aviva's relationship with ABN India commenced in June 2002 under which the bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 21 branches at 14 locations.
American Express Bank
American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is the world’s largest single card issuer, based on purchase volume generated of nearly 55 million cards worldwide. Present in India since 1921, American Express provides high quality travel related and financial services in India.
Aviva Life Insurance entered into a strategic alliance with American Express for distribution of Life Insurance in June 2002 to offer top-of the line savingcum-protection plans to Amex bank and card customers. Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth Management channel. The retail card segment is being tapped through outbound calling to the Amex card holders. The American Express Inbound call centre also pitches Aviva products to its callers.
The Lakshmi Vilas Bank Ltd The Lakshmi Vilas Bank Ltd, based out of Karur, is among the top private banks in India. It has 221 branches with a customer base of 1.2 million, across 10 states. Currently Aviva products are sold across 204 branches of LVB. CANARA BANK Canara Bank is one of the largest retail banks in India with 2,513 branches spread across 25 States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank branches in 103 Cities.
Punjab & Sind Bank Punjab & Sind Bank was established in the year 1908. Based on the principles of social commitment to the people, help the farmers, and the weaker sections of the society to raise their standard of living and play a significant role in the development of the country. Even after 96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its founding fathers. Punjab
and Sindh Bank has a network of 759 branches and 132 extension counters all over the country with close to 9,765 employees. 42 per cent of its branches are in the rural and semi urban areas. In line with spirit of liberalisation the Bank has laid special emphasis on International banking, Hire purchase, Leasing, Tele-banking and Credit card facilities. The bank has also started their Rural Development Division, High Tech Agricultural Branches, Specialised Locker Branches, Industrial Finance and SSI branches, besides Housing Finance Branch for the convenience of its customers. Centurion Bank of Punjab Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail and corporate banking products and services. It holds leadership positions in retail two-wheeler loans and commercial vehicle loans. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service. RBI has approved the merger between Centurion Bank and Bank of Punjab effective from October 1st, 2005. The merged entity, named Centurion Bank of Punjab, has a strong nationwide franchise of 241 branches and extension counters and 389 ATMs. With strengths in the retail, SME and agriculture businesses the bank is well poised to capture the opportunities that exist in the Indian market. The combined bank’s 3,500 employees will continue to provide support and an enhanced banking experience to our customers, as part of a bigger, stronger bank. IndusInd Bank IndusInd Bank Ltd., is one of the leading new-generation private-sector banks in India, commenced operations in 1994 and had a net worth of Rs.866 crore as at March 31, 2006. As of date, the Bank has a network of 148 branches and 87 offsite ATMs spread over 118 geographical locations in 24 states and Union Territories. Recently the Bank received licenses for opening 19 new branches across the country. With this the network will now increase to 180 branches by MarchApril 2007. Internationally, the Bank has a representative office each in Dubai and London. The Bank also enjoys strategic alliances with Union National
Bank, Abu Dhabi in the UAE and Doha Bank in Qatar. These strategic alliances encompass a wide range of banking services, including deposit accounts, remittance business, loans, wealth management advisory, distribution of third party products, trade finance, global banking, and investment banking including corporate finance.
PRODUCTS & SERVICES
The right investment strategies won't just help you plan for a more comfortable tomorrow -- they will help you get Kal Par Control. At Aviva, life insurance plans are created keeping in mind the changing needs of you and your family. Our life insurance plans are designed to provide you with flexible options that meet both protection and savings needs. We offer our customers a full range of transparent, flexible and value for money products that include whole life (LifeLong), endowment (LifeSaver, EasyLife Plus), child policy (Young Achiever) single premium (LifeBond, LifeBond Plus), Pension (PensionPlus), Term (LifeShield), fixed term protection plan (Freedom LifePlan) and a 5 year recurring premium investment cum protection plan (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to choose cover levels, indexation and partial withdrawals. We also offer you a choice of investment options. You can choose between our Unit Linked Fund or our With Profits Fund. The With Profits Fund guarantees that the selling price of the units will never fall. The unit value of this fund is increased by crediting bonuses on a daily compounding basis. The fund provides investment security to your capital. The Unit Linked Fund is designed to provide relatively more progressive capital growth wherein you automatically receive the benefit related to the investment performance of the fund. Under Unit Linked Fund, on some of our products we offer a choice of fund options:
Protector Fund:
Progressive returns on your investment by investing higher element of assets in debt securities, with minimum exposure to equities. The fund comprises of debt securities in the range of 60-100%, equities in the range of 0-20% and money market and cash in the range of 0-20%.
Secure Fund:
The investment objective of this fund is to provide progressive return on your investment with a minimum guarantee on maturity. The fund comprises of debt securities in the range of 50-100%, equities in the range of 020% and money market and cash in the range of 0-20%. Initially the equity exposure will be 10 %.
Growth Fund:
The investment objective of this fund is to provide high capital growth by investing higher element of assets in the equity market. The fund will comprise of debt securities in the range of 0-50%, equities in the range of 0-85% and money market and cash in the range of 0-20%. Initially the equity exposure will be 75%.
Balanced Fund:
The investment objective of this fund is to provide capital growth by availing opportunities in debt and equity markets and providing a good balance between risk and return. The fund comprises of debt securities in the range of 50-90%, equities in the range of 0-45% and money market and cash in the range of 0-10%. Aviva also offers a whole range of group insurance products and corporate solutions. We have a dedicated team that works with corporates across the country.
PURE PROTECTION PRODUCTS
Aviva Life Insurance offer the following policies to take care of our protection needs• Life Long • Life Shield
LIFE LONG
LifeLong is designed to suit your individual requirements, no matter which life stage you are at, and changes as your needs change during your entire life. For the same premium, you can opt for a higher life cover (protection) and lower savings or lower life cover and higher savings. The choice of protection-savings mix is yours, and the decision can be based on your priorities and age. You can also cover your spouse under the same policy without any additional expense through a joint life policy (first death basis). LifeLong offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
LIFESHIELD
Insurance Term Pure LifeShield is a low cost life insurance plan which guarantees to pay a lump sum amount in case of your death during the term of the policy. LifeShield can be purchased for any life between 18 to 55 years of age. However, the maximum age of the life insured at expiry of the policy is 65 years. The minimum and maximum policy terms are 5 years and 40 years, respectively. The minimum annual premium is Rs.2,000 and the minimum sum insured is Rs.500,000. The sum insured of the policy can be increased (only upto 40 years of age) once by 50% (subject to maximum increase of Rs.1,000,000) during the term of the policy, without submitting any evidence of good health, if: - You decide to increase the sum insured within three months of your marriage. - You decide to increase the sum insured within three months of the birth of your child.
This option to increase the sum insured is available if the policy has been accepted on standard rates. It can be exercised only when outstanding term of the policy is at least 5 years and the policy is inforce for full sum insured
PURE SAVINGS PRODUCTS
Aviva Life Insurance offer the following savings policies• • • • • • • • • • • • Easy Life Plus Young Achiever Life Bond 5 Life Bond Life Saver Life Long Pension Plus Save Guard Life Bond Plus Save Guard Junior Life saver Plus Freedom Life Plan
• Easy Life Plus
EasyLife Plus is a simple, unit-linked endowment plan with the benefit of life protection. By choosing an appropriate premium level and term, you can match the maturity date of the plan to a specific savings need such as your child’s education, wedding or any other financial need. EasyLife Plus also offers an extra protection against accident without requiring you to undergo any medical examinations. EasyLife Plus offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit
Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Young Achiever Child policy YoungAchiever is a regular premium life insurance product designed to meet the financial needs of your children- be it higher education, marriage, establishing themselves while starting a career or a business, or any other need. Through this policy, you save regularly to meet your children's needs, and at the same time their financial needs are taken care of should something unfortunate happen to you. YoungAchiever can be purchased on the life of any one of the parents with the child as the nominee. YoungAchiever offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Life Bond LifeBond 5 is an investment plan where you pay premiums only for 5 years and get investment returns with maximum tax benefits. This unit-linked plan gives you the flexibility that you, as a smart investor, seek both at the time of investment and at maturity. LifeBond 5 offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%. LifeBond is a unit linked, Single Premium Whole Life plan, designed to provide you the maximum benefit of investment returns and tax benefits. You can gift LifeBond to your newborn and provide financial security when he/ she needs it. Also, you can cover your spouse under the same policy without any additional expense through a joint life policy (second death basis). LifeBond offers a With Profits Fund and 3 unit linked funds, which give you the flexibility of choosing how your money should be invested in terms of risk and security of return on investment.
• Life saver Life Saver is a unit linked endowment plan designed to meet your specific longterm savings needs such as education and wedding costs for your children, with the added reassurance of a life cover to meet those costs in the unfortunate event of your death before the policy matures. You can take LifeSaver on single life or jointly with your spouse (first death basis). LifeSaver can be purchased on any life between 18 to 65 years. However, for any rider cover the maximum entry age is 55 years. LifeSaver offers a With Profits or 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest 100% of your premiums either in With Profits Fund or in any of the Unit Linked Funds. The minimum allocation in each selected unit linked fund must be 10%.
• Pension plus Pension Plus is a tax efficient, personal pension plan that is designed to help you earn a regular income, even after you stop working. Through this plan, you build a fund till you retire which provides you financial security after retirement. Pension Plus can be purchased for any life between 18 to 65 years of age. The minimum age at maturity is 40 years and the maximum age at maturity is 70 years. You have the option of either paying regular premiums or paying a single premium. The minimum annual premium is Rs. 6,000 for regular premium and Rs 1,00,000 for a single premium option. The minimum policy term is 5 years. A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds.
• Save Guard SaveGuard is a simplified, unit-linked endowment plan. It is specially designed to help you save for important milestones like your child’s education and marriage, building a house or even creating a retirement fund. It also provides financial protection for your dependants in the unfortunate event of your
demise. SaveGuard offers life insurance as well as an investment opportunity without requiring you to undergo any medical examinations. SaveGuard offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%.
• Life Bond plus
LifeBond Plus is a unit linked, Single Premium Endowment plan, designed to provide you the maximum benefit of investment returns and tax benefits.The entry age is 18 to 65 years (last birthday) and in case rider is opted, the maximum entry age is 55 years. The policy terms is 5 to 25 years (maximum age at maturity 70 years).A With Profits Fund or 3 unit linked funds; Secure, Growth and Balanced Funds. • SaveGuard Junior SaveGuard Junior is a simplified, unit-linked endowment plan, which covers your child’s life. It is specially designed to help you save for important milestones in your child’s life like education, setting up a business or marriage. SaveGuard Junior offers an investment opportunity as well as life insurance without requiring you to undergo any medical examinations. SaveGuard Junior offers entry ages from 0 to 17 years, a choice of policy terms, from 10 to 30 years as well as an option of investing in any or a combination of 3 unit-linked funds. SaveGuard Junior also offers a guarantee that the units invested in the Secure Fund will not be less than the price they were bought at plus 3% interest compounded annually. LifeSaver Plus is a Unit Linked endowment plan designed to meet your future savings requirements besides offering a higher life cover. The plan offers full Sum Assured in addition to the Fund Value as death benefit in case of your unfortunate death, thereby providing a higher financial protection to your family. You can also opt for the “Systematic Transfer Plan”. The plan provides a guaranteed addition at maturity. In addition, the Plan offers a minimum guarantee on maturity on the funds allocated towards the Secure
Fund. • LifeSaver Plus LifeSaver Plus can be purchased for any age between 0 to 60 years. However, in case any rider is opted for the maximum entry age is 55 years. You can also choose the premium payment term separately from the policy term so that you can match your paying capacity to your financial goals. You have the freedom of choosing from 4 Unit Linked Funds: Protector, Secure, Growth and Balanced Funds and the option of investing through the Systematic Transfer Plan. In addition, you get a minimum 2% Guaranteed Addition at maturity and have the choice of increasing or decreasing your premium amount whenever you like. • Freedom Life Plan Freedom LifePlan is a unit-linked limited premium paying endowment plan with guaranteed loyalty additions. This unit linked plan gives you the flexibility to customise the plan to suit your individual needs and alter it subsequently with your changing needs. You can take Freedom LifePlan on single life or jointly with your spouse (first death basis). Freedom LifePlan offers 3 Unit Linked investment fund options, which give you the flexibility of choosing how your money should be invested in terms of the risk and the security of the return on the investment. You can invest your premiums in any one fund or in a combination of funds. The minimum allocation in each selected fund must be 10%.
The pension plan market in India currently constitute 8 players who offers 18 products
Sl. No.
Minimum Name of the Plan Entry Age Sum Assured Term
Max Maturity Age
Mode of Payment
Life Insurance Corporation 1. 2. 3. Jeevan Dhara - Plan No.96 Jeevan Akshay - Plan No.97 Jeevan Suraksha - Plan No.122 New Jeevan Akshay - Plan No.144 New Jeevan Dhara - Plan No.145 Bima Nivesh 2001-Plan No.141 ICICI Pru Forever Life ICICI PruReAssure ICICI Pru ForeverLife (Deferred Pension) ICICI Pru LifeLink Pension ICICI Pru Lifetime 18 30 25 Rs. 20,000 Rs. 100 2 5 No 70 Yrs Yearly, half yearly One time Yearly, half yearly, quarterly, monthly One Time Yearly, half yearly, quarterly, monthly Single Premium One time Yearly, half yearly, quarterly, monthly Yearly, Half Yearly, Quarterly, Monthly Yearly, half yearly
4.
30
Rs, 1,000
-
None
5.
12
Rs. 20,000
NA
75 Yrs
6. ICICI 7. 8. 9. 10. 11. HDFC 12.
35
Rs.25,000
5
75 Yrs
18 7 8 18 0
Rs 50000 Rs 50,000 Rs.50000 -
5 5 5 3 10
65 65 70 70
HDFC Pension Plan
18
-
10
70
Tata AIG Life Insurance 13. 14. 15. 16. Assured Golden Years Plan Nirvana - Pension Plan Kotak Capital Multiplier Plan Pension Plan Easy Life Retirement (Participating) Plan 18 18 18 Rs. 25,000 10 5 5 60 65 70
Om Kotak Mahindra Aviva India Life Insurance Max New York Life 17. 20 10 70
BENEFITS OF INVESTING WITH AVIVA
Tax benefits Tax benefits as per the prevailing provisions of the income Ta Act, 1961
Choice of investment options You can choose between the unit linked fund or the with profits fund: Unit linked funds are designed to provide relatively more progressive capital growth wherein you automatically receive the benefits related to the investment performance of the fund. Unit linked fund offers three investment fund option which gives you the flexible of choosing how your money should be invested in terms of the risk the and the security of the return on the investment: Secure fundThe investment objective of this fund is to provide progressive return on your investment with a capital guarantee on maturity. Growth fundThe investment objective of this fund is to provide high capital growth by investing higher element of assets in the equity market. Balance fundThe investment objective of this fund is to provide capital growth by availing opportunities in debt and equity markets and provides you a good balance between risk and return. Indexation To protect against inflation, indexation offers the option of increasing the premium and the sum insured so that you get a meaningful Amount on maturity. Partial With drawls Option for partial withdrawals from your fund whenever you need. Additional Single Premium Flexibility of making lump sum investments as often as you require over the duration of the policy. These increase the saving value of your policy besides maximizing tax benefits.
Cover Level Cover level is a multiple of annual premium used to calculate the sum insured. You have the flexibility of choosing your own cover level, depending upon your needs.
CUSTOMERS STISFACTION
Fair treatment of customers is, fundamentally, good business practice and is key to securing customers confidence in financial services. All our businesses are focused on that goal.
As the world’s fifth largest insurer and one of Europe’s leading providers of life and pensions products,Aviva as committed to ensuring open and transparent relationship with our customers, we also seek to mind or our customers at every of their lives. Although we have yet to introduce one overarching customer policy to support or diverse activities, the standards of business conduct policy does provide minimum standards for the Aviva business to follow in seeking to provide our customer with a service hallmarked by integrity, quality and care. Business throughout Aviva are also committed to managing service levels offered to customers and are continually seeking new and improved ways of providing better customer service.
Market Share of different insurance company
As awareness about AVIVA life insurance Company among rural people is very less than other company that is the reason of less market share of AVIVA.
DATAANALYSIS
&
INTERPRETATIONS
Q.1 Which age group do you belong to?
Age < 25 years 26-35 years 36-45 years 46-55 years 55 years or more
No of People 6 25 40 19 10
40
Q.2 The income class scenario of sample size.
Income class (in Rs.) Business Class Service Class In % 63 37
35 30 25
63% of people was from business class, major people was able to understand the things more precisely as businessmen are more conscious about any investment plan.
Q.3 What is your income level?
Annual Income Less than Rs. 600000 Rs. 600000 to 1.5 lakhs Rs. 1.5 to 2.5 lakhs More than Rs. 2.5 lakhs TOTAL
No. of people 30 22 35 13 100
52% people belongs to income level less than 1.5 lakh and rest more than 1.5 lakh.
13
Q.4 From which sources have you get awareness about insurance?
AWARNESS ABOUT INSURANCE News Paper TV Radio Agents Friends
NO. OF PEOPLE 20 35 12 25 8
As TV becomes the most entertaining visual media, that why people get early information through TV and in case of insurance, agent play very important role in case of information.
40 35
Q.5 What are the main considerations while investment in insurance?
30 25
MAIN CONSIDERATION
NO. OF PEOPLE
Tax Saving & Investment Protection Pension TOTAL
36 16 34 14 100
Most of people investing in life insurance for Tax benefits and the second thing of their consideration is protection. Some people investing in insurance for pension scheme that’s why only 14% are considering insurance for pension.
40
36
Q.6 WHICH BRAND WILL YOU PREFER? Brand ICICI Prudential AVIVA Life Insurance HDFC Standard Life LIC TOTAL PERCENTAGE 14 13 8 65 100
70% 60%
LIC is govt. sector player; therefore people have more faith on LIC. In case of private player ICICI Prudential has largest network that’s why 14% people are giving importance to ICICI and 13% to AVIVA.
50% 40% 30%
Q.7 Which private player you know more? PRIVATE PLAYER ICICI Prudential AVIVA Life Insurance HDFC Standard Life BAJAJ Allianz Birla Sun Life TOTAL PERCENTAGE 45 21 25 6 3 100
In case of private player ICICI Prudential has largest network that’s why 45% people are aware with the brand ICICI, 24% to AVIVA and 25 % to HDFC standard life.
45 45 40
Q.8 Do you think that life insurance is a good investment? Yes No 90% 10%
As we have seen earlier, in present business scenario peoples are taking insurance as an investment opportunity rather than safety. Therefore 90% gave preference towards investment option.
Conclusion
I have conclude that in present market scenario the main focus of peoples are not only on safety & security but also on the better return. Therefore, we can say that insurance also act as investment opportunity because of Tax benefits, good return and security of life. These are the basic reason, which shows that people become more conscious about return and security of money than life insurance factor. This is the cause of growing of insurance sector in geometric form.
SUGGESTION
After analyzing the whole project, I would like to give few suggestion to company to increase their market area. These facts are:
Company must have to focus on advertisement to aware customers regarding Aviv’s products.
Since peoples are focusing on good return so company must have to give preference on those products. Company must also focus on rural area to increase market share.
Company must has to focus on relationship strategy to retain the old customer and create new customer.
LIMITATON
• There was lack of time on the part of respondents. • There may be some bias information provide by company professionals. • As only single city surveyed, it does not represent the overall view of Indian market. • Some of the respondents may give the incorrect information.
BIBLIOIGRAPHY Research Methodology – Kothari Marketing Management- Philip Kotler WEBSITES http://www.answers.com http://www.wikipedia.com http://www.Avivalifeinsurance.com
• • •
Annexure
Q.1 Which age group do you belong to?
Age < 25 years 26-35 years 36-45 years 46-55 years 55 years or more Q.2 The income class scenario of sample size. Income class (in Rs.) Business Class Service Class
Q.3 What is your income level? Annual Income Less than Rs. 600000 Rs. 600000 to 1.5 lakhs Rs. 1.5 to 2.5 lakhs More than Rs. 2.5 lakhs TOTAL Q.4 From which sources have you get awareness about insurance? AWARNESS ABOUT INSURANCE News Paper TV Radio Agents Friends
Q.5 What are the main considerations while investment in insurance?
MAIN CONSIDERATION
Tax Saving & Investment Protection Pension TOTAL
Q.6 WHICH BRAND WILL YOU PREFER? Brand ICICI Prudential AVIVA Life Insurance HDFC Standard Life LIC TOTAL Q.7 Which private player you know more? PRIVATE PLAYER ICICI Prudential AVIVA Life Insurance HDFC Standard Life BAJAJ Allianz Birla Sun Life TOTAL
Q.8 Do you think that life insurance is a good investment? Yes No
