Description
The project delivers an insight about the factors which affect the insurance sector. It also brings out that which sector of customer should be targeted to enhance the business.
SUMMER TRAINING REPORT ON
ANALYSIS OF FACTORS, AFFECTING THE INSURANCE SECTOR
FOR AVIVA LIFE INSURANCE LTD. COMPANY
BY DANISH AKRAM ROLL NO:- B-15 In partial fulfilment for the award of Master of Business Administration AND Post Graduate in Diploma and Business Management 2012 – 2014
New Delhi Institution of Management f-13 , Okhla industrial area phase 1 new Delhi – 110020 e-mail: info@ ndimedu.com, website:www.ndimedu.com
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SUMMER TRAINING REPORT ON ANALYSIS OF FACTORS, AFFECTING THE INSURANCE SECTOR FOR AVIVA LIFE INSURANCE LTD COMPANY
Under
The supervision of Mr. Kapis Kumar Malik
Submitted by: Danish Akram Roll No:- B-15
submitted to: Mr. Sanjay Tomar
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ACKNOWLEDGEMENT I hereby express my gratitude to Mr. T.R. Ramchandran (C.E.O & Managing Director) Aviva Life Insurance Co. India Ltd., for providing me with an opportunity to work in this organization. I also thank him for his valuable inputs in my project and for also giving me an insight into the actual working of the company. I express my indebtedness and gratitude to Mr. Kpish kumar malik( Senior Sales Manager, Aviva Life Insurance Co. India Ltd.) and Mr.Abhishek Verma (tax manager) , Mr. Jaswinder Singh(branch head) at Aviva life insurance office. Our college mentor Sir. Sanjay Tomar, his hands were always ready for help at each and every time. My sincere gratitude goes to each of the above respected persons, in what so ever terms it may be has given a fruitful meaning to the completion of my project. Last but not the least, I am grateful to my heartfelt love for my parents, my friends for their constant support and blessings helped me throughout this project (Danish Akram)
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DECLARATION I, Danish Akram student of MBA+PGDBM (2012-14) New Delhi Institution of Management, hereby certify that I have successfully completed the training on '' analysis of factors, affecting the insurance sector '' during my summer internship of 8 weeks. All the information given in the project is true and whole project is my own written not copied from anywhere else. (Danish Akram)
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TABLE OF CONTENTS S.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TOPIC ACKNOWLEDGEMENT DECLARATION EXECUTIVE SUMMARY COMPANY FPROFILE: PARTNERS,MANAGEMENT CIRCLE PRODUCTS WHAT IS INSURANCE FUNCTION OF INSURANCE ROLE AND IMPORTANCE OF INSURANCE NO OF INSURANCE COMPANIES IN INDIA INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) MARKET SHARE OF LIFE INSURANCE COMPANIES IN INDIA RESEARCH REPORT CONCLUSION LIMITATIONS,SUGGESTIONS BIBLIOGRAPHY PAGE NO. 3 4 6 7 13 15 16 17 22 24 25 27 42 43 43
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EXECUTIVE SUMMARY The product titled “analysis of factor affecting the insurance sector” Undertaken in “AVIVA Life Insurance” AVIVA is a: UK based 5th largest life insurance group. Having about : • 40 million customer base. • $377 billion of assets under management. AVIVA has a joint venture with DABUR in India. In this venture: • AVIVA holds 26% stake. • DABUR holds 74% stake. Monopoly of LIC has been to make Indian insurance to change it face and pace to tap the market to make the new challenges in it. Insurance in India is not about India only: it is the private sector for all players. The name you would seen in Indian insurance market is something like Bajaj (Indian company) + Allianz (foreign player), TATA (Indian company) + Aig (foreign player), so many like them. Companies now are tapping so many ways to capture the market hence adopting different way to hold large portion of market. My project was to understand the different factors which effects the insurance market to increase their market share and along with meeting their own target to achieve the position of No:1in the respective field. My summer training helped me a lot to complete my project in order to learn a lot of things of corporate. As a project trainee the first task was given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to our target competition. For this we developed questionnaires.
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COMPANY PROFILE : AVIVA LIFE INSURANCE LTD.
Aviva Life insurance co. India Ltd. Introduction of company Aviva India is an Indian life assurance firm, and a joint venture between Aviva plc, a British assurance company, and Dabur Group, an Indian conglomerate. Aviva began operations in July 2002 as a joint venture with Dabur Group, one of India?s oldest business houses. As per the Indian insurance sector regulations, Aviva plc has a 26% stake and Dabur has a 74% stake in the JV partnership. Private Type: Investment Industry: Insurance Head quarts: Key people: Gurgaon, Haryana Mr. T.R. Ramachandran (Managing Director & Chief Executive Officer) Protection, Investment, Savings & Retirement policies
Products:
Operations Aviva India employs close to 3700 people, over 20,000 Financial Advisers with 135 branches across the country. Aviva has also partnered with more than 70 insurance brokers. Aviva has a balanced distribution network through Banc assurance, Direct Sales Force and online products. This includes a direct sales force of more than 20,000 financial planning advisers, in 99 branches across the country and multiple banc assurance partnerships with private sector banks, co-operatives and regional rural banks. Through its distribution setup and partnerships, Aviva reaches customers in over 1000 towns and cities across India. Aviva has been focusing on the Online Platform in recent years, and a number of products, including Aviva i-Life, Aviva Health Secure and Aviva i-Shield were launched recently. This is in line with the company?s strategy to focus on newer formats and products that are easier for customers to understand and buy.
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Corporate social responsibility Aviva India is involved with education of underprivileged children, under the Street to School programme, the international corporate social responsibility programme of Aviva plc. Within India, it works with NGOs in various parts of India to enable education for street and slum children, and helps them with funds for setting up and running outreach centres. Aviva India also conducts the Aviva Great Wall of Education in various cities each year, which collects books for underprivileged children. Over the last three years, the Aviva Great Wall of Education has collected more than 2 million books, which have been given to more than 500,000 underprivileged children across the country. The Aviva Great Wall of Education collected over 1.1 million books in 2011 alone. The Aviva Great Wall of Education was also listed in the Limca Book of Records for being the „largest wall of books? for its debut year. It has received multiple awards, including the Bronze award at the inaugural CRY Child Rights Champion Award, 'Highly Commended Award' at the TVE Corporate Sustainability Awards given at BAFTA, London, Gold at Spikes Asia 2010, a Bronze at Effies 2010 and a Silver at the Effies in 2011. It also won an Indy?s award in the „Community and Social Welfare? category in 2011, and was awarded „Out of the box PR idea? award at India PR & Corporate Communications Awards in 2012. Aviva India employees volunteer time to conduct workshops with children enrolled with its partner NGOs as well. AVIVA is a: ? UK based 5th largest life insurance group. ? Having about : ? 40 million customer base. ? $377 billion of assets under management. ? AVIVA has a joint venture with DABUR. In this venture: ? AVIVA holds 26% stake.
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? ?? DABUR holds 74% stake.
STAKE In Company
AVIVA 26%
DABUR 74%
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 FPA?s 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. ? ?
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?? DABUR GROUP & AVIVA GROUP Dabur group: founded in 1884. Dabur is one of India?s oldest & largest groups of companies with a consolidated annual turnover in excess of Rs 2,834 corers. A professionally managed company, it is the country?s leading producer of traditional healthcare products. ??Corporate website:http://www.dabur.com Aviva group: It is UK?s one of the largest insurers and one of Europe?s leading providers of life and general insurance. Aviva is the world?s sixth largest insurance group based on gross worldwide premiums for 2010 year .Aviva?s principal business activities are long term savings, fund management and general insurance, with worldwide total sales of $40.6 billion and operating profits of at $2.5 billion at 31 December ,2011. Aviva has 43 million customers base worldwide. ??Corporate website :http://www.aviva.com PARTNERS. i. IndusInd Bank: - IndusInd Bank Ltd., is one of the leading new-generation private-sector banks in India. It commenced operations in 1994 and had a net worth of Rs.866 corer as of March 31, 2006. At present, the Bank has a network of 148 branches and 87 offsite ATMs spread over 118 geographical locations in 24 states and Union Territories. ii. Royal Bank of Scotland Group: - In 300 years, The Royal Bank of Scotland Group has grown to become one of the largest financial services groups in the world. They operate around the globe to provide banking services for individuals, businesses and institutions. Aviva's relationship with RBS commenced in June 2002 when the bank was known as ABN AMRO. The Bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 31 branches at 22 locations.
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iii. DBS:- DBS Bank India is a branch of DBS Bank Ltd., one of the largest financial services groups in Asia. DBS has rapidly expanded its network to 12 branches and 40 ATMs spread across the country in key locations. In the last 5 years, DBS India has staff strength to over 800. Today, it is the first and the largest Asian bank in India and is committed to building a universal banking franchise in India with a significant presence across businesses, clients, products and services. iv. Cooperative and Regional Rural Banks a. Rajasthan Gramin Bank b. Vidharbha Kshetriya Gramin Bank c. Prime Cooperative Bank d. Sutlej Gramin Bank
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Management Team
Designation Name T R Ramachandran Chief Executive Officer & Managing Director Rishi Piparaiya Ravi Bhadani Munish Sharda Jyoti Vaswani Sanjeeb Kumar Anupam Tyagi Amit Malik Snehil Gambhir Vijayalakshmi Natarajan Jitendra Nayyar Chief Operating Officer Director, Operations Director, Finance Director, Bancassurance Company Secretary and Director Legal & Compliance Director, Direct Sales Force Chief Investment Officer & Director, Fund Management Appointed Actuary Chief Risk Officer Director, HR Marketing and
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PRODUCTS: i. Aviva Young Scholar Advantage: - An insurance cum investment plan to help secure your child's education. ii. Aviva Young Scholar Secure: - An insurance plan to secure important milestones of your child's education. iii. Aviva Family Income Builder: - A life insurance plan in which you pay for 12 years and get double of what you have paid every year for the next 12 years, guaranteed iv. Aviva Wealth Builder: - A Life Insurance Plan which gives back double the total premium in a lump sum. Guaranteed v. Aviva Live Smart Plan: - A Unit Linked Insurance Plan which gives you the flexibility to make your own investment decisions for long terms growth vi. Aviva Dhan Samruddhi: - A traditional life insurance plan that gives guaranteed cash back every 5 years in addition to guaranteed maturity benefit, to meet your short and long term needs. vii. Aviva Dhan Vriddhi:- A traditional insurance plan that guarantees the
money you planned for viii. Aviva Dhan Varsha: - An insurance plan that offers guaranteed
additions to help grow your wealth. ix. Aviva Freedom Life Advantage: - A flexible life insurance plan that help you meet any financial goals. x. Aviva life Bond Advantage: - A life insurance plan that allows a lump sum investment to help grow your wealth. xi. Aviva life Shield Plus: - A plan that offers comprehensive protection for your family at a nominal cost. xii. Aviva life Shield Advantage: - Protect your family and also get your
premium back xiii. Aviva life shield Platinum: - A versatile high protection plan to secure
your loved ones.
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xiv. click. xv.
Aviva i-life: - An insurance plan that offers complete protection at a
Aviva Health Secure: - Aviva Health Secure gives complete protection against critical illnesses at a nominal cost.
xvi.
Aviva i-shield: - Aviva i-Shield is an online term insurance plan with
return of premium. xvii. Aviva Health Plus: - A health-cum-savings insurance plan that gives Aviva Amar Suraksha: - A plan to help you secure your family?s future. Aviva Jana Suraksha: - A plan to ensure that your child?s dreams are
your premium back. xviii. xix.
protected at all times. xx.Aviva Garmeen Suraksha: - A low cost solution to help you financially protects your loved ones. xxi. Aviva Anmol Suraksha: - A comprehensive fixed term plan with
protection cum savings. xxii. Aviva Corporate life Plus: - Provides life cover for employees /
members of an organization to protect their families. xxiii. Aviva Corporate Shield Plus: - Aviva Corporate Shield Plus is a term
insurance plan in lieu of the EDLI. xxiv. Aviva Group Gratuity Advantage: - Provides financial security to employees at the time of retirement along with life cover.
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What Is Insurance Insurance: Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. In other words, Insurance is defined as a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk is uncertainty of a financial loss. It should not be confused with the chance of loss which is the probable number of losses out of a given number of exposures. It should not be confused with peril which is defined as the cause of loss or with hazard which is a condition that may increase the chance of loss. Finally, risk must not be confused with loss itself which is the unintentional decline in or disappearance of value arising from a contingency. Wherever there is uncertainty with respect to a probable loss there is risk. Every risk involves the loss of one or other kind. The function of insurance is to spread the loss over a large number of persons who are agreed to co-operate each other at the time of loss. The risk cannot be averted but loss occurring due to a certain risk can be distributed amongst the agreed persons. They are agreed to share the loss because the chances of loss, i.e. the time, amount, to a person are not known. Anybody of them may suffer loss to a given risk, so , the rest of the persons who are agreed will share the loss. The larger the number of such persons the easier the process of distribution of loss, In fact, the loss is shared by them by payment of premium which is calculated on the probability of loss. In olden time, the contribution by the persons was made at the time of loss. The insurance is also defined as a social device to accumulate funds to meet the uncertain losses arising through a certain risk to a person insured against the risk.
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Functions of Insurance: The functions of insurance can be studied into two parts (i) Primary Functions, and (ii) Secondary Functions. Primary Functions: i. Insurance provides certainty: Insurance provides certainty of payment at the uncertainty of loss. The uncertainty of loss can be reduced by better planning and administration. But the insurance relieves the person from such difficult task. Moreover, if the subject matters are not adequate, the self-provision may prove costlier. There are different types of uncertainty in a risk. The risk will occur or not, when will occur how much loss will be there? In other words, there are uncertainty of happening of time and amount of loss. Insurance removes all these uncertainty and the assured is given certainty of payment of loss. The insurer charges premium for providing the said uncertainty. Insurance provides protection: The main function of the insurance is to provide protection against the probable chances of loss. The time and amount of loss are uncertain and at the happening of risk, the person will suffer loss in absence of insurance. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot check the happening of risk but can provide for losses at the happening of the risk. Risk – sharing: The risk is uncertain and therefore, the loss arising from the risk is also uncertain. When risk takes place, the loss is shared by all the persons who are exposed to the risk. The risk-sharing in ancient times was done only at a time of damage or death; but today, on the basis of probability of risk , the share is obtained from each and every insured in the shape of premium without which protection is not guaranteed by the insurer. Secondary functions: Besides the above primary functions, the insurance works for the following functions: i. Prevention of loss: The insurance joins hands with those institutions which are engaged in preventing the losses of the society because the reduction in loss causes lesser payment to the assured and so more saving is possible which will assist in reducing the premium. Lesser premium invites more business and more business cause lesser share to the assured. So again premium is reduced to, which will stimulate more business and more protection to the masses. Therefore the insurance assist financially to the health
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organisation, fire brigade, educational institutions and other organisations which are engaged in preventing the losses of the masses from the death or damage. ii. Provides capital: The insurance provides capital to society. The accumulated funds are invested in productive channel. The dearth of capital of the society is minimised to a greater extent with the help of investment of insurance. The industry, the business and the individual are benefited by the investment and loans of the insurers. Improves Efficiency: The insurance eliminates worries and miseries of losses at death and destruction of property. The carefree person can devote his body and soul together for better achievement. It improves not only his efficiency, but the efficiencies of the masses are also advanced. Helps in economic progress: The insurance by protecting the society from losses of huge damage, destruction and death, provides an initiative to work hard for the betterment of the masses. The next factor of economic progress, the capital is also immensely provided by the masses. The property, the valuable assets, the man, the machine and the society cannot lose much at the disaster. Role and importance of Insurance The process of insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern affairs. Not only does it the ends of individuals, or of special groups of individuals, it tends to pervade and to transform our modern social order, too. The role and importance of insurance, here has been discussed in three phases: (i) uses to individual, (ii) uses to a special group of individuals, viz, to business or industry, and (iii) uses to the society. Uses to an individual: i. Insurance provides security and safety: The insurance provides safety and security against the loss on a particular event. In case of life insurance payment is made when death occurs or the term of insurance is expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. In other words, security against premature death and old age sufferings are provided by life insurance. Insurance protects Mortgaged Property: At the death of the owner of the mortgaged property, the property is taken over by the lender of money and the family will be deprived of the uses of the property. On the other hand, the
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iii.
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mortgagee wishes to get the property insured because at the damage or destruction of the property he will lose his right to get the loan repaid. The insurance will provide adequate amount to the dependents at the early death of the property-owner to pay off the unpaid loans. Similarly, the mortgagee gets adequate amount at the destruction of the property. iii. Life insurance provides profitable Investment: Individuals unwilling or unable to handle their own funds have been pleased to find an outlet for their investment in life policies. Endowment policies, multipurpose policies, deferred annuities are certain better form of investment. The elements of investment i.e. regular saving, capital formation, and return of the capital along with certain additional return are perfectly observed, in life insurance. In India the insurance policies carry a special exemption from income-tax, wealth tax, and gift tax and estate duty. An individual from his own capacity cannot invest regularly with enough of security and profitability. The life insurance fulfils all these requirements with a lower cost. The beneficiary of the policy holder can get a regular income from the life insurer; if the insured amount is left with him. iv. Life Insurance encourages saving: The elements of protection and investment are present only in case of life insurance. In property insurance, only protection element exists. In most of the life policies elements of saving predominates. These policies combine the programs of insurance and savings. v. Life Insurance fulfils the needs of a person: The needs of a person are divided into, (a) Family needs, (b) Old – age needs, (c) Readjustment needs, (d) Special needs, (e) The clean-up needs. (a) Family Needs: Death is certain, but the time is uncertain. So, there is uncertainty of the time when the sufferings and financial stringencies may be fall on the family. Moreover, every person is responsible to provide for the family. Therefore, the provision for children up to their reaching earning period and for widow up to long life should be made. Any other provision except life insurance will not adequately meet this financial requirement of the family. Whole life policies are the better means of meeting such requirements. (b) Old-age needs: The provision for old-age is required where the person is surviving more than his earning period. The reduction of income in old-age is serious to the person and his family. If no other family member starts earning, they will be left with nothing and if there is no property, it would be more piteous state. The life insurance
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provides old age funds along with the protection of the family by issuing various policies. (c) Re-adjustment Needs: At the time of reduction in income whether by loss of unemployment, disability, or death, adjustment in the standard of living of family is required. The family members will have to be satisfied with meagre income and they have to settle down to lower income and social obligations. Before coming down to the lower standard and to be satisfied with that, they require certain adjustment income so that the primary obstacles may be reduced to minimum. The life insurance helps to accumulate adequate funds. (d) Special Needs: There is certain special requirement of the family which is fulfilled by the earning member of the family. If the member becomes disable to earn the income due to old age or death, those needs may remain unfulfilled and the family will suffer. ? Need for Education ? Marriage ? Insurance needs for settlement of children (e) Clean-up funds: After death, ritual ceremonies, payment of wealth taxes and income taxes are certain requirements which decrease the amount of funds of the family member. Insurance comes to help for meeting these requirements. Multipurpose policy, education and marriage policies , capital redemption policies are the better policies for the special needs.
Uses to business: The insurance has been useful to the business society also. Some of the uses are discussed below: (i) Uncertainty of business losses is reduced: In the world of business, commerce and industry a huge number of properties are employed. With a slight slackness or negligence, the property may be turned into ashes. The accident may be fatal not only to the individual or property but to the third party also. New construction and new establishment are possible only with the help of insurance. Business – efficiency is increased with insurance: When the owner of a business is free from botheration of losses, he will certainly devote much time to the business. The care free owner can work better for the maximisation of the profit. The new as well as old businessmen are guaranteed payment of certain amount with the insurance policies at the death of the person; at the damage, destruction or disappearance of the property or goods.
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(ii)
(iii)
Key Man Indemnification: Key man is that particular man whose capital, expertise, experience, energy, ability to control, goodwill and dutifulness make him the most valuable asset in the business and whose absence will reduce the income of the employer tremendously and up to that time when such employee is not substituted. The death or disability of such valuable lives will, in many instances, prove a more serious loss than that by fire or any hazard. The potential loss to be suffered and the compensation to the dependents of such employee require an adequate provision which is met by purchasing adequate life policies. The amount of loss may be up to the amount of reduced profit, expenses involved in appointing and training, of such persons and payment to the dependents of the man. The Term Insurance Policy or Convertible Term Insurance Policy is more suitable in this case. Enhancement of credit: The business can obtain loan by pledging the policy as collateral for the loan. The insured persons are getting more loans due to certainty of payment at their deaths. The amount of loan that can be obtained with such pledging of policy, with interest thereon will not exceed the cash value of the policy. In case of death, this value can be utilised for setting of the loan along with the interest. If the borrower is unwilling to repay the loan and interest, the lender can surrender the policy and get the amount of loan and interest thereon repaid. The redeemable debentures can be issued on the collateral of capital redemption policies. The insurance properties are the best collateral and adequate loans are granted by the lenders. Business Continuation: In any business particularly partnership business may discontinue at the death of any partner although the surviving partners can restart the business, but in both the cases the business and the partners will suffer economically. The insurance policies provide adequate funds at the time of death. Each partner may be insured for the amount of his interest in the partnership and his dependents may get that amount at the death of the partner. With the help of property insurance, the property of the business is protected against disasters and the chance of disclosure of the business due to the tremendous waste or loss. Welfare of Employees: The welfare of employees is the responsibility of the employer. The former are working for the latter. Therefore the latter has to look after the welfare of the former which can be provision for disability and provision for old age.
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(iv)
(v)
(vi)
These requirements are easily met by the life insurance, accident and sickness benefit and pensions which are generally provided by group insurance. The premium for group insurance is generally paid by the employer. This plan is the cheapest form of insurance for employers to fulfil their responsibilities. The employees will devote their maximum capacities to complete their jobs when they are assured of the above benefits. The struggle and strife between employees and employer can be minimised easily with the help of such schemes. Uses to society: Some of the uses of insurance to society are discussed in the following sections: (i) Wealth of the society is protected: The loss of a particular wealth can be protected with the insurance. Life insurance provides loss of human wealth. The human material, if it is strong, educated and care free, will generate more income. Similarly, the loss of damage of property at fire, accident, etc. can be well indemnified by the property insurance; cattle, crop, profit and machines are also protected against their accidental and economic losses. With the advancement of the society, the wealth or the property of the society attracts more hazardous and, so new types of insurance are also inverted to protect them against the possible losses. Each and every member will have financial security against old age, death, damage, destruction and disappearance of his wealth including the life wealth. Through prevention of economic losses, instance protects the society against degradation. Through stabilization and expansion of business and industry, the economic security is maximised. The present, future and potential human and property resources are well-protected. The children are getting expertise education, working classes are free from botheration and older people are guiding at ease. The happiness and prosperity are observed everywhere with the help of insurance. Economic growth of the country: For the economic growth of the country, insurance provides strong hand and mind, protection against the loss of property and adequate capital to produce more wealth. The agriculture will experience protection against losses of cattle, machines, tools and crop. This sort of protection stimulates more production in agriculture, in industry, the factory premises, machines, boilers and profit insurances provide more confidence to start and operate the study welfare of employees create a conductive atmosphere to work. Adequate capital from insurers accelerates the production cycle.
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(ii)
Similarly in business, too, the property and human material are protected against certain losses; capital and credit are expanded with the help of insurance. Thus, the insurance meets all the requirements of the economic growth of a country. (iii) Reduction in Inflation: The insurance reduces the inflationary resources in two ways. First, by extracting money in supply to the amount of premium collected and secondly, by providing sufficient funds for production narrow down the inflationary gap. With reference to Indian context it has been observed that about 5.0 per cent of the money in supply was collected in form of premium. The share of premium contributed to the total investment of the country was about 10.0 per cent. The main two causes of inflation, namely, increased money in supply and decreased production are properly controlled by insurance business, Insurance Need and Selling. Insurance companies in India In India there are so many insurance companies in public sector and private sector: Public Sector
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Government of India Fully owns 1 company: Life Insurance Corporation of India Private Sector
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AEGON Religare Life Insurance Aviva Life Shriram Life Insurance Bajaj Allianz Life Insurance Bharti AXA Life Insurance Co Ltd. Birla Sun Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Star Union Dai-ichi Life Insurance DLF Pramerica Life Insurance Edelweiss Tokio Life Insurance Co. Ltd Future Generali Life Insurance Co Ltd HDFC Standard Life Insurance Company Limited ICICI Prudential IDBI Federal Life Insurance IndiaFirst Life Insurance Company ING Vysya Life Insurance
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Kotak Life Insurance Max Life Insurance PNB MetLife India Life Insurance Reliance Life Insurance Company Limited Sahara Life Insurance SBI Life Insurance Company Limited TATA AIG Life Insurance
Insurance sector and India Insurance is a subject listed in the Union list in the Seventh Schedule to the Constitution of India where only centre can legislate. The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26%(as of 2013 there have been proposals to extend the FDI up to 49% to strengthen the Insurance Market even further) the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government. Insurance is a big and one of the most rapidly growing sectors in India. It?s the prime reasons why leading market players are attracted to the Indian insurance market for business expansion. The Confederation of Indian Industry indicates that it has recorded instant and steady growth with a record growth rate of 32% to 34%. India has the largest number of life insurance policies in the world which is great news for the leading insurance companies in India. India?s state owned life insurance corporation (LIC) leads the life insurance sectors in India. The Indian Life Insurance industry is one on the strongest growing sectors in the country. Currently a US$ 41-billion industry, India is the fifth largest life insurance market and growing at a rapid pace of 32-34% annually. Today there are 24 life insurance companies operating in India. Despite all these facts and figures, around 80% of Indian population doesn?t have life insurance coverage. Amongst these 80% people most of them don?t have any kind of life coverage, while some of them do have some sort of health insurance and other non-life insurance policies. People, who don?t have insurance coverage in India, belong to socially and economically weaker strata with lack of pension and social security systems. This is a great opportunity to the insurers to expand their reach throughout all the strata of Indian society.
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Insurance regulatory authority Insurance laws and regulations in India takes care of all matters related to various insurance companies in the country. Much of the development and growth of the insurance sector in India is due to the government's decision to nationalize the insurance business and to allow private and foreign insurance companies to establish their businesses here. In India, there is one regulatory authority i.e. IRDA which oversees different functioning of the life insurance companies in India and provide them with guidelines. Insurance Regulatory and Development Authority (IRDA) Insurance Regulatory and Development Authority (IRDA) is the controlling body, overseeing important aspects and functioning of various insurance companies in India. Established by the government, it safeguards the interest of the insurance policy holders of the country.
i. ii. iii. iv. v.
Some of IRDA's functions include: To regulate, ensure and promote the orderly growth of the insurance business, To prescribe regulations on the investment of funds by insurance companies, To regulate the maintenance of the margin of solvency, To adjudicate the disputes between insurers and intermediaries, To supervise the functioning of the Tariff Advisory Committee
Other supporting organisations which facilitate in the working of the industry: 1. Tariff Advisory Committee The main task of Tariff Advisory Committee is to regulate and control the rates, benefits, terms and conditions offered by life insurance companies in India.
2. Insurance Association of India All insurance companies in India are members of the Insurance Association of India. It has two councils under its patronage, mainly a. Life Insurance Council b. General Insurance Council
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3. Ombudsmen Ombudsmen play important role in regulating and ensuring smooth functions of the insurance companies. They are appointed to address all complaints relating to settlements of claims. Anyone having a grievance against an insurance company can approach Ombudsmen for redressal.
1.7 Market share of life insurance companies in India
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Comparison of insurance companies on the basis of no. of policies sold. (Top Life Insurance Companies)
Number of Policies Up to Dec 2011 20404281 785938 698109 640483 589855 491927 405662 397408 199275 161910 109614 100216 100143 98904 82037 73490 69151 47322 45833 44899 43929 38498 36228 1968
Life Insurance Companies LIC ICICI Prudential Reliance Life Bajaj Allianz Birla Sunlife SBI Life Max New York HDFC Standard Tata AIG ING Vysya Kotak Mahindra Old Mutual Aviva Future Generali Life Met Life Star Union Dai-ichi Shriram Life BhartiAxa Life AegonReligare IDBI Federal Canara HSBC OBC Life DLF Pramerica IndiaFirst Sahara Life Edelweiss Tokio
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RESEARCH REPORT
I did my research on different factors which affects the life insurance market and investment market. This research report is totally depends on online survey through surveymonkey.com. My respondents are mostly at the age group of 21year to 35year and both the gender of different group. Objective of research To know the interest of young generation towards life insurance. To know the interest in life insurance among different income group. Mission Development of life insurance market among young generation, and making insurance product according to preference group. Research Mythology Data sample is young generation people of age 21year to 35 year of different income group and different educational qualification. Population All young generation people of age 21year to 35 year. Scope Development of insurance business and set the actual target segment.
I. II.
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QUESTIONNAIRE Survey on investment market and garment preference 1. I. II. III. IV. Qualification Under Graduate Graduate Postgraduate Professional education
2. Sex I. Male II. Female 3. Marital Status I. Married II. unmarried 4. I. II. III. IV. 5. I. II. III. IV. Annual Income 200000-400000 400000-600000 600000-800000 800000-1000000+ Occupation Job Business Student Other 6. Your monthly savings are.... 10000-20000 20000-40000 40000-60000 60000-80000 7. Do you intend to invest in future? Yes No 8. Which types of garments you use? Branded Local Not-specified
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I. II. III. IV.
I. II.
I. II. III.
9. Which one is your favorite brand? ………………………………………………………………………………..
I. II. III. IV. V. VI. VII.
10. Where do you want to invest? Fixed Deposit Life Insurance General Insurance Ulips Shares Mutual Fund Term Plan www.surveymonkey.com/s.aspx?PREVIEW_MODE=DO_NOT_USE_THIS_L INK_FOR_COLLECTION&sm=pdK7u59WmTlW713j5f730Rh Powered by SurveyMonkey Check out our sample surveys and create your own now !
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My survey report ANNAUAL INCOME & INVESTMENT PREFERENCE
12 no if respondent 10 8 6 4 2 0 0 1 2 Ammual Income 3 4 0 1 2 5 6 7
Age Bar:- 21 year to 35 year
Index CODE 0 1 2 5 6 7
INVESTMENT PREFERENCE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2 3 4
Annual income Not respondent 200000 - 400000 400000 – 600000 600000 – 800000 800000–1000000+
This survey report gives the relationship between annual income and investment preference of respondent. 33.33% of total respondent are not interested on any investment proposal. Most of the respondent are interested to invest on fixed deposit that is 33.33% and 14.00% are interested on life insurance. Rest 20% respondent are interested on all other investment policies. On the basis of annual income those respondent whose income level is Rs 200000 – 400000 are mostly interested to investment rather than high income group, they are equally interested to invest on fixed deposit and life insurance. And the income group 400000 – 600000 is responds for fixed deposit and term plan only. If we target the people of annual income level 200000 – 400000 for life insurance it is better for the insurance market.
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GENDER & INVESTMENT PREFRENCE
20 No of respondent 15 10 16 15 5 2 1 0 0 1 Gender 2 5 6 3 2 1 3 3 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7
Age Bar:- 21 year to 35 year
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2
Gender Not respondent Male Female
This is the investment preference report according to gender. Mostly male respondent are interested in investment, they are interested to invest in all investment profile. Male respondent are mostly respond to invest in fixed deposit i.e. 32%. They are also interested in life insurance and share as well. Female respondent have similar response for both fixed deposit and life insurance that is 42.86% of female respondent. So if our target people are female then we can target for both fixed deposit and life insurance equally. If our target people are male then we can target for all investment proposals but fixed deposit is mostly preferable then share and life insurance.
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INVESTMENT PLANNING IN FUTURE & INVESTMENT PREFRENCE
16 14 12 10 8 6 4 2 0 no. of respondent
0 1 14 5 7 2 0 investment planning 1 1 12 6 5 3 2 2 5 6 7
Age Bar;- 21 year – 35 year
Index CODE 0 1 2 5 6 7
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1
Investment planning No Yes
73.68% respondent have the plan to invest in future, but 33% of them don?t have any idea that where have to invest. Most of them are interested to invest in fixed deposit. Approx 14% and 12% respondent are prefer to invest in life insurance and share respectively, some other are also interested in mutual funds and term plane. Three fields of investment marketing are mostly like by the respondent i.e fixed deposit, life insurance and shares but the loved fixed deposit. It is the great opportunity for the life insurance market to grow in this field.
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MARITAL STATUS & INVESTMENT PREFRENCE
18 16 14 12 10 8 6 4 2 0
No. of responce
0 1 16 13 2 1 0 4 2 1 1 marrital status 1 7 6 2 2 2 2 5 6 7
Index CODE Code MARRITAL STATUS 0 Not respondent 1 Married 2 Unmarried 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Half of the marred respondents are not interested to invest anywhere, some of them are willing to invest but their first preference is fixed deposit then life insurance and share as well as. Unmarred respondent are interested to invest in all investment propositions but 34.78% of unmarred respondent are prefer to invest in fixed deposit, 15.22% are in life insurance, 13% are in shares and rest 8.70% are equally interested in mutual funds and term plans. We can target unmarried people for fixed deposit but we also can target them for life insurance.
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MONTHLY SAVINGS & INVESTMENT PREFRENCE
12 No. of respondent 10 8 6 4 2 0 0 1 2 monthly saving 3 4 7 4 22 11 10 7 43 12 1 2 1 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2 3 4
Monthly saving Not Respondent 100000 – 200000 200000 – 400000 400000 – 600000 600000 – 800000
This is the survey among the people on the basis of their monthly savings and their investment preference. 45.61% respondents are not responding their monthly savings but they are responding their investment preference. 19.30% respondents are willing to invest on fixed deposit while they do not want to respond on their savings. And 7% prefer to invest on life insurance. 3.5% respondents are also preferred to invest on shares & mutual funds. Respondents with monthly savings Rs 10000 to 20000 are mostly interested on different investment proposal, 12.30% respondents are preferred fixed deposit, 7% are on life insurance, 5.26% are on shares, 1.75% is on mutual funds and 3.5 % are on term plan. In other group of monthly savings respondents are not much interested on investment.
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QUALIFICATION & INVESTMENT PREFRENCE
10 no of respondent 8 6 4 2 11 0 0 1 2 Qualification 3 4 1 12 9 9 5 4 5 3 11 3 212 4 1 1 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Qualification 1 2 3 4 Undergraduate Graduate Post Graduate PROFESSIONAL EDUCATION
Most of the under-graduate respondents are interested in fixed deposit, while graduate people are prefer in all plans. In most of the slots fixed deposit bar is longer than other while Post graduate people (mostly MBAs) are not interested in fixed deposit. Its means most of the people are interested in fixed deposit and there second preference is life insurance. So we can target every people for life insurance without bothering about their qualification.
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ANNUAL INCOME, PREFRENCE
10 8 6 4 2 221 0 0 0 1 0 1 1 1 1 12 9 7 6 5 4 21
MONTHALY
SAVING
&
INVESTMENT
0 1 2 5 1 3 21 1 2 2 1 2 1 0 2 1 3 1 3 0 4 1 1 4 6 7
Age Bar:- 21 year to 35 year
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Annual income (lower) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000 Code (upper) 0 1 2 3 4 5 Monthly saving Not respondent 10000-20000 20000-40000 40000-60000 60000-80000 80000-100000
The table shows that most of the respondent who belongs to income group 200000 – 400000 and their monthly savings are 10000 – 20000 are interested in different investment proposal, most of them are interested in fixed deposit and then life insurance, share and mutual funds respectively. In other group of respondent are not so much of interested in investment marketing. So we can target on this group of people for life insurance. To target on this group we have to formulate the insurance plan on the basis if these people. Premiums should not as much that it is difficult to pay for them. It must be optimal level, premium should not be very high and it gives good return on investment.
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GENDER, QUALIFICATION & INVESTMENT PREFRENCE
10 8 6 4 2 1 0 0 0 2 0 1 2 1 3 4 2 3 2 4 2 1 1 12 9 6 333 11 3 112 5 3 1 121 1 11 0 1 2 5 6 7
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (upper) 1 2 3 4 Qualification Undergraduate Graduate Post Graduate Professional education Code (lower) 0 1 2 Gender Not respondent Male Female
This is the survey report on the basis of gender, qualification and their investment preference. We can see that most of the under graduate male respondents are likely to invest in fixed deposit (15.79%). This might be the possibilities of lack of knowledge about other investment propositions. Graduate male respondents are equally interested to invest their money in different fields of investment, fixed deposit, life insurance and shares (5.26%). Male people are more interested on investment especially graduate people so we can target them for any investment proposal. If our target people are females then it is better that to target for life insurance.
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ANNUAL INCOME, GENDER & INVETMENT PREFRENCE
8 7 no of respondent 6 5 4 3 2 1 0 0 1 0 2 1 1 2 1 2 2 0 1 3 2 1 4 11 7 6 3 11 7 6 4 2 1 2 1 2 2 1 2 1 1 2 1 11 0 1 2 5 6 7
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Gender (upper) 0 1 2 Not respondent Male Female Code Annual income (lower) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000
This survey is done on the basis of annual income, gender and there investment preference. The table shows that respondents are prefer to invest in fixed deposit and then life insurance and shares. Mostly 200000 to 600000 income group people are interested in investment rather than high income group people. Male people of lower income group should be targeted for fixed deposit and life insurance, and female people of lower income group should be targeted for life insurance. So we will target both male and female people of lower income group for life insurance. Higher income group people are not interested in life insurance they are mostly interested on fixed deposit, share and mutual funds.
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MARITAL STATUS, ANNUAL INCOME & INVESTMENT PREFRENCE
9 8 7 6 5 4 3 2 1 0 0 0 3 0 1 2 1 3 4 0 1 2 2 3 4
0 1 2 5 6 7
Index
Code (upper) 0 1 2 3 4 Annual income Not respondent 200000-400000 400000-600000 600000-800000 800000-1000000 CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code MARRITAL (lower) STATUS 0 1 2 Not respondent Married Unmarried
This survey shows that married people of lower income group (200000 – 400000) are interested on life insurance and the income group (400000 600000) are interested on fixed deposit. Unmarried people of income group (200000-400000) are mostly interested on fixed deposit and then in life insurance while the other income group of unmarried people are not interested on life insurance. So if we target the married and unmarried people of lower income group it is batter for the life insurance market.
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QUALIFICATION, ANNUAL INCOME & INVESTMENT PREFRENCE
7 6 6 5 4 4 3 3 2 22 1 11 0 0 0 0 1 1 4 0 1 2 2 3 0 1 3 4 0 1 4 2 3 1 1 1 1 1 1 1 11 11 111 1 11 11 1 2 2 2 2 2 2 3 3 0 1 2 5 6 7
Index
Code Annual income (upper) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000 CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (lower) 1 2 3 4 Qualification Undergraduate Graduate Post Graduate Professional education
Undergraduate respondent of lower income or no income are willing to invest in fixed deposit mostly, graduate people of lower income are mostly prefer life insurance and then in fixed deposit while post-graduate people are not interested in fixed deposit, they are mostly interested in life insurance, shares and mutual funds. If we were to target for life insurance, we have to target lower income group. They are more willing to invest in life insurance in each slot of qualification. Higher income group people are mostly interested on fixed deposit and mutual funds.
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GENDER, MARITAL STATUS & INVESTMENT PREFRENCE
14 12 10 8 6 4 2 0
No of respondent
1313 0 1 6 21 0 0 321 1 1 4 2 1 Gender & marital status 22 1 1 2 33 2 2 5 6 7
Age Bar:- 21 year to 35 year
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (upper) 0 1 2 Marital status Not respondent Married Unmarried
Code Gender (lower) 0 Not respondent 1 male 2 Female
42% of married male respondent are not interested in investment, and most of the rest people are interested in fixed deposit. Similarly most of the un-married male respondents are interested in fixed deposit and than in share, life insurance, mutual funds and term plans. Un-married female respondent are prefer to invest in fixed deposit and life insurance as well as. After analyzing these results we can say that fixed deposit and life insurance market will be more grooming market. Unmarried male people are also interested in share market. Fixed deposit and insurance are the most preferred investment plan for every group of respondent male/female/married/unmarried. Insurance companies have to target on both gender of unmarried people, they are more interested in investment then married people.
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Conclusion
Analysis of findings Most of the respondent are interested in fixed deposit and then in life insurance. 16% respondent (age 21-35year) are interested in life insurance. 95% of them are of lower income group (200000-400000). Higher income group people are not interested on life insurance. Females are mostly interested on life insurance. Lower income group and lower saving group respondent are mostly responds for life insurance. Married respondent are not very much interested on life insurance they are interested on fixed deposit while unmarried respondent (15% of total respondent) are mostly interested on life insurance. If we look on the basis of qualification then mostly graduate respondent are respond for life insurance. Over all we can say that most of the lower income group (200000 - 400000) respondent of graduation qualified, unmarried both male and female are interested on investment in life insurance.
Analysis of objectives of study; The object of research study is to know about the interest of young generation to invest in life insurance sector and the result shows that they are interested in this field, 16% of respondent are interested to invest in life insurance. And second objective is to know the investment preference in life insurance of different income group, I found that 95% of respondent who are interested in life insurance are of lower income (200000 - 400000) group.
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Future Scope of study; This is the broad field of study, I tried to study a part of this vast field and I found lots of result, these results are very useful for business development in future.
Limitations & Constraints of company 1> High Premium; annual premium of any insurance product in Aviva is very high. Minimum annual premium of any product in Aviva is more than Rs 25000 when the premium term is very high such as more than 20 year. This is not appropriate for lower income group. 2> Restricted target market; Aviva is restricted itself to target only in higher income group people while here a broad market of lower income people for insurance market. Recommendations & Suggestions; 1> Annual premium should not be very high it should be appropriate for lower income group. 2> Product line should be broad so that every customer could be investing in life insurance as per their choice and income level.
References / Bibliography; www.avivaindia.com www.surveymonkey.com www.gmail.com www.google.com
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THANK YOU
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doc_204128159.docx
The project delivers an insight about the factors which affect the insurance sector. It also brings out that which sector of customer should be targeted to enhance the business.
SUMMER TRAINING REPORT ON
ANALYSIS OF FACTORS, AFFECTING THE INSURANCE SECTOR
FOR AVIVA LIFE INSURANCE LTD. COMPANY
BY DANISH AKRAM ROLL NO:- B-15 In partial fulfilment for the award of Master of Business Administration AND Post Graduate in Diploma and Business Management 2012 – 2014
New Delhi Institution of Management f-13 , Okhla industrial area phase 1 new Delhi – 110020 e-mail: info@ ndimedu.com, website:www.ndimedu.com
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SUMMER TRAINING REPORT ON ANALYSIS OF FACTORS, AFFECTING THE INSURANCE SECTOR FOR AVIVA LIFE INSURANCE LTD COMPANY
Under
The supervision of Mr. Kapis Kumar Malik
Submitted by: Danish Akram Roll No:- B-15
submitted to: Mr. Sanjay Tomar
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ACKNOWLEDGEMENT I hereby express my gratitude to Mr. T.R. Ramchandran (C.E.O & Managing Director) Aviva Life Insurance Co. India Ltd., for providing me with an opportunity to work in this organization. I also thank him for his valuable inputs in my project and for also giving me an insight into the actual working of the company. I express my indebtedness and gratitude to Mr. Kpish kumar malik( Senior Sales Manager, Aviva Life Insurance Co. India Ltd.) and Mr.Abhishek Verma (tax manager) , Mr. Jaswinder Singh(branch head) at Aviva life insurance office. Our college mentor Sir. Sanjay Tomar, his hands were always ready for help at each and every time. My sincere gratitude goes to each of the above respected persons, in what so ever terms it may be has given a fruitful meaning to the completion of my project. Last but not the least, I am grateful to my heartfelt love for my parents, my friends for their constant support and blessings helped me throughout this project (Danish Akram)
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DECLARATION I, Danish Akram student of MBA+PGDBM (2012-14) New Delhi Institution of Management, hereby certify that I have successfully completed the training on '' analysis of factors, affecting the insurance sector '' during my summer internship of 8 weeks. All the information given in the project is true and whole project is my own written not copied from anywhere else. (Danish Akram)
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TABLE OF CONTENTS S.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 TOPIC ACKNOWLEDGEMENT DECLARATION EXECUTIVE SUMMARY COMPANY FPROFILE: PARTNERS,MANAGEMENT CIRCLE PRODUCTS WHAT IS INSURANCE FUNCTION OF INSURANCE ROLE AND IMPORTANCE OF INSURANCE NO OF INSURANCE COMPANIES IN INDIA INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) MARKET SHARE OF LIFE INSURANCE COMPANIES IN INDIA RESEARCH REPORT CONCLUSION LIMITATIONS,SUGGESTIONS BIBLIOGRAPHY PAGE NO. 3 4 6 7 13 15 16 17 22 24 25 27 42 43 43
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EXECUTIVE SUMMARY The product titled “analysis of factor affecting the insurance sector” Undertaken in “AVIVA Life Insurance” AVIVA is a: UK based 5th largest life insurance group. Having about : • 40 million customer base. • $377 billion of assets under management. AVIVA has a joint venture with DABUR in India. In this venture: • AVIVA holds 26% stake. • DABUR holds 74% stake. Monopoly of LIC has been to make Indian insurance to change it face and pace to tap the market to make the new challenges in it. Insurance in India is not about India only: it is the private sector for all players. The name you would seen in Indian insurance market is something like Bajaj (Indian company) + Allianz (foreign player), TATA (Indian company) + Aig (foreign player), so many like them. Companies now are tapping so many ways to capture the market hence adopting different way to hold large portion of market. My project was to understand the different factors which effects the insurance market to increase their market share and along with meeting their own target to achieve the position of No:1in the respective field. My summer training helped me a lot to complete my project in order to learn a lot of things of corporate. As a project trainee the first task was given to me was to understand the basic behaviour of the consumer in order to manipulate the market according to our target competition. For this we developed questionnaires.
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COMPANY PROFILE : AVIVA LIFE INSURANCE LTD.
Aviva Life insurance co. India Ltd. Introduction of company Aviva India is an Indian life assurance firm, and a joint venture between Aviva plc, a British assurance company, and Dabur Group, an Indian conglomerate. Aviva began operations in July 2002 as a joint venture with Dabur Group, one of India?s oldest business houses. As per the Indian insurance sector regulations, Aviva plc has a 26% stake and Dabur has a 74% stake in the JV partnership. Private Type: Investment Industry: Insurance Head quarts: Key people: Gurgaon, Haryana Mr. T.R. Ramachandran (Managing Director & Chief Executive Officer) Protection, Investment, Savings & Retirement policies
Products:
Operations Aviva India employs close to 3700 people, over 20,000 Financial Advisers with 135 branches across the country. Aviva has also partnered with more than 70 insurance brokers. Aviva has a balanced distribution network through Banc assurance, Direct Sales Force and online products. This includes a direct sales force of more than 20,000 financial planning advisers, in 99 branches across the country and multiple banc assurance partnerships with private sector banks, co-operatives and regional rural banks. Through its distribution setup and partnerships, Aviva reaches customers in over 1000 towns and cities across India. Aviva has been focusing on the Online Platform in recent years, and a number of products, including Aviva i-Life, Aviva Health Secure and Aviva i-Shield were launched recently. This is in line with the company?s strategy to focus on newer formats and products that are easier for customers to understand and buy.
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Corporate social responsibility Aviva India is involved with education of underprivileged children, under the Street to School programme, the international corporate social responsibility programme of Aviva plc. Within India, it works with NGOs in various parts of India to enable education for street and slum children, and helps them with funds for setting up and running outreach centres. Aviva India also conducts the Aviva Great Wall of Education in various cities each year, which collects books for underprivileged children. Over the last three years, the Aviva Great Wall of Education has collected more than 2 million books, which have been given to more than 500,000 underprivileged children across the country. The Aviva Great Wall of Education collected over 1.1 million books in 2011 alone. The Aviva Great Wall of Education was also listed in the Limca Book of Records for being the „largest wall of books? for its debut year. It has received multiple awards, including the Bronze award at the inaugural CRY Child Rights Champion Award, 'Highly Commended Award' at the TVE Corporate Sustainability Awards given at BAFTA, London, Gold at Spikes Asia 2010, a Bronze at Effies 2010 and a Silver at the Effies in 2011. It also won an Indy?s award in the „Community and Social Welfare? category in 2011, and was awarded „Out of the box PR idea? award at India PR & Corporate Communications Awards in 2012. Aviva India employees volunteer time to conduct workshops with children enrolled with its partner NGOs as well. AVIVA is a: ? UK based 5th largest life insurance group. ? Having about : ? 40 million customer base. ? $377 billion of assets under management. ? AVIVA has a joint venture with DABUR. In this venture: ? AVIVA holds 26% stake.
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? ?? DABUR holds 74% stake.
STAKE In Company
AVIVA 26%
DABUR 74%
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 FPA?s 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. ? ?
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?? DABUR GROUP & AVIVA GROUP Dabur group: founded in 1884. Dabur is one of India?s oldest & largest groups of companies with a consolidated annual turnover in excess of Rs 2,834 corers. A professionally managed company, it is the country?s leading producer of traditional healthcare products. ??Corporate website:http://www.dabur.com Aviva group: It is UK?s one of the largest insurers and one of Europe?s leading providers of life and general insurance. Aviva is the world?s sixth largest insurance group based on gross worldwide premiums for 2010 year .Aviva?s principal business activities are long term savings, fund management and general insurance, with worldwide total sales of $40.6 billion and operating profits of at $2.5 billion at 31 December ,2011. Aviva has 43 million customers base worldwide. ??Corporate website :http://www.aviva.com PARTNERS. i. IndusInd Bank: - IndusInd Bank Ltd., is one of the leading new-generation private-sector banks in India. It commenced operations in 1994 and had a net worth of Rs.866 corer as of March 31, 2006. At present, the Bank has a network of 148 branches and 87 offsite ATMs spread over 118 geographical locations in 24 states and Union Territories. ii. Royal Bank of Scotland Group: - In 300 years, The Royal Bank of Scotland Group has grown to become one of the largest financial services groups in the world. They operate around the globe to provide banking services for individuals, businesses and institutions. Aviva's relationship with RBS commenced in June 2002 when the bank was known as ABN AMRO. The Bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 31 branches at 22 locations.
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iii. DBS:- DBS Bank India is a branch of DBS Bank Ltd., one of the largest financial services groups in Asia. DBS has rapidly expanded its network to 12 branches and 40 ATMs spread across the country in key locations. In the last 5 years, DBS India has staff strength to over 800. Today, it is the first and the largest Asian bank in India and is committed to building a universal banking franchise in India with a significant presence across businesses, clients, products and services. iv. Cooperative and Regional Rural Banks a. Rajasthan Gramin Bank b. Vidharbha Kshetriya Gramin Bank c. Prime Cooperative Bank d. Sutlej Gramin Bank
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Management Team
Designation Name T R Ramachandran Chief Executive Officer & Managing Director Rishi Piparaiya Ravi Bhadani Munish Sharda Jyoti Vaswani Sanjeeb Kumar Anupam Tyagi Amit Malik Snehil Gambhir Vijayalakshmi Natarajan Jitendra Nayyar Chief Operating Officer Director, Operations Director, Finance Director, Bancassurance Company Secretary and Director Legal & Compliance Director, Direct Sales Force Chief Investment Officer & Director, Fund Management Appointed Actuary Chief Risk Officer Director, HR Marketing and
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PRODUCTS: i. Aviva Young Scholar Advantage: - An insurance cum investment plan to help secure your child's education. ii. Aviva Young Scholar Secure: - An insurance plan to secure important milestones of your child's education. iii. Aviva Family Income Builder: - A life insurance plan in which you pay for 12 years and get double of what you have paid every year for the next 12 years, guaranteed iv. Aviva Wealth Builder: - A Life Insurance Plan which gives back double the total premium in a lump sum. Guaranteed v. Aviva Live Smart Plan: - A Unit Linked Insurance Plan which gives you the flexibility to make your own investment decisions for long terms growth vi. Aviva Dhan Samruddhi: - A traditional life insurance plan that gives guaranteed cash back every 5 years in addition to guaranteed maturity benefit, to meet your short and long term needs. vii. Aviva Dhan Vriddhi:- A traditional insurance plan that guarantees the
money you planned for viii. Aviva Dhan Varsha: - An insurance plan that offers guaranteed
additions to help grow your wealth. ix. Aviva Freedom Life Advantage: - A flexible life insurance plan that help you meet any financial goals. x. Aviva life Bond Advantage: - A life insurance plan that allows a lump sum investment to help grow your wealth. xi. Aviva life Shield Plus: - A plan that offers comprehensive protection for your family at a nominal cost. xii. Aviva life Shield Advantage: - Protect your family and also get your
premium back xiii. Aviva life shield Platinum: - A versatile high protection plan to secure
your loved ones.
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xiv. click. xv.
Aviva i-life: - An insurance plan that offers complete protection at a
Aviva Health Secure: - Aviva Health Secure gives complete protection against critical illnesses at a nominal cost.
xvi.
Aviva i-shield: - Aviva i-Shield is an online term insurance plan with
return of premium. xvii. Aviva Health Plus: - A health-cum-savings insurance plan that gives Aviva Amar Suraksha: - A plan to help you secure your family?s future. Aviva Jana Suraksha: - A plan to ensure that your child?s dreams are
your premium back. xviii. xix.
protected at all times. xx.Aviva Garmeen Suraksha: - A low cost solution to help you financially protects your loved ones. xxi. Aviva Anmol Suraksha: - A comprehensive fixed term plan with
protection cum savings. xxii. Aviva Corporate life Plus: - Provides life cover for employees /
members of an organization to protect their families. xxiii. Aviva Corporate Shield Plus: - Aviva Corporate Shield Plus is a term
insurance plan in lieu of the EDLI. xxiv. Aviva Group Gratuity Advantage: - Provides financial security to employees at the time of retirement along with life cover.
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What Is Insurance Insurance: Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. In other words, Insurance is defined as a co-operative device to spread the loss caused by a particular risk over a number of persons who are exposed to it and who agree to ensure themselves against that risk. Risk is uncertainty of a financial loss. It should not be confused with the chance of loss which is the probable number of losses out of a given number of exposures. It should not be confused with peril which is defined as the cause of loss or with hazard which is a condition that may increase the chance of loss. Finally, risk must not be confused with loss itself which is the unintentional decline in or disappearance of value arising from a contingency. Wherever there is uncertainty with respect to a probable loss there is risk. Every risk involves the loss of one or other kind. The function of insurance is to spread the loss over a large number of persons who are agreed to co-operate each other at the time of loss. The risk cannot be averted but loss occurring due to a certain risk can be distributed amongst the agreed persons. They are agreed to share the loss because the chances of loss, i.e. the time, amount, to a person are not known. Anybody of them may suffer loss to a given risk, so , the rest of the persons who are agreed will share the loss. The larger the number of such persons the easier the process of distribution of loss, In fact, the loss is shared by them by payment of premium which is calculated on the probability of loss. In olden time, the contribution by the persons was made at the time of loss. The insurance is also defined as a social device to accumulate funds to meet the uncertain losses arising through a certain risk to a person insured against the risk.
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Functions of Insurance: The functions of insurance can be studied into two parts (i) Primary Functions, and (ii) Secondary Functions. Primary Functions: i. Insurance provides certainty: Insurance provides certainty of payment at the uncertainty of loss. The uncertainty of loss can be reduced by better planning and administration. But the insurance relieves the person from such difficult task. Moreover, if the subject matters are not adequate, the self-provision may prove costlier. There are different types of uncertainty in a risk. The risk will occur or not, when will occur how much loss will be there? In other words, there are uncertainty of happening of time and amount of loss. Insurance removes all these uncertainty and the assured is given certainty of payment of loss. The insurer charges premium for providing the said uncertainty. Insurance provides protection: The main function of the insurance is to provide protection against the probable chances of loss. The time and amount of loss are uncertain and at the happening of risk, the person will suffer loss in absence of insurance. The insurance guarantees the payment of loss and thus protects the assured from sufferings. The insurance cannot check the happening of risk but can provide for losses at the happening of the risk. Risk – sharing: The risk is uncertain and therefore, the loss arising from the risk is also uncertain. When risk takes place, the loss is shared by all the persons who are exposed to the risk. The risk-sharing in ancient times was done only at a time of damage or death; but today, on the basis of probability of risk , the share is obtained from each and every insured in the shape of premium without which protection is not guaranteed by the insurer. Secondary functions: Besides the above primary functions, the insurance works for the following functions: i. Prevention of loss: The insurance joins hands with those institutions which are engaged in preventing the losses of the society because the reduction in loss causes lesser payment to the assured and so more saving is possible which will assist in reducing the premium. Lesser premium invites more business and more business cause lesser share to the assured. So again premium is reduced to, which will stimulate more business and more protection to the masses. Therefore the insurance assist financially to the health
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ii.
iii.
organisation, fire brigade, educational institutions and other organisations which are engaged in preventing the losses of the masses from the death or damage. ii. Provides capital: The insurance provides capital to society. The accumulated funds are invested in productive channel. The dearth of capital of the society is minimised to a greater extent with the help of investment of insurance. The industry, the business and the individual are benefited by the investment and loans of the insurers. Improves Efficiency: The insurance eliminates worries and miseries of losses at death and destruction of property. The carefree person can devote his body and soul together for better achievement. It improves not only his efficiency, but the efficiencies of the masses are also advanced. Helps in economic progress: The insurance by protecting the society from losses of huge damage, destruction and death, provides an initiative to work hard for the betterment of the masses. The next factor of economic progress, the capital is also immensely provided by the masses. The property, the valuable assets, the man, the machine and the society cannot lose much at the disaster. Role and importance of Insurance The process of insurance has been evolved to safeguard the interests of people from uncertainty by providing certainty of payment at a given contingency. The insurance principle comes to be more and more used and useful in modern affairs. Not only does it the ends of individuals, or of special groups of individuals, it tends to pervade and to transform our modern social order, too. The role and importance of insurance, here has been discussed in three phases: (i) uses to individual, (ii) uses to a special group of individuals, viz, to business or industry, and (iii) uses to the society. Uses to an individual: i. Insurance provides security and safety: The insurance provides safety and security against the loss on a particular event. In case of life insurance payment is made when death occurs or the term of insurance is expired. The loss to the family at a premature death and payment in old age are adequately provided by insurance. In other words, security against premature death and old age sufferings are provided by life insurance. Insurance protects Mortgaged Property: At the death of the owner of the mortgaged property, the property is taken over by the lender of money and the family will be deprived of the uses of the property. On the other hand, the
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iii.
iv.
ii.
mortgagee wishes to get the property insured because at the damage or destruction of the property he will lose his right to get the loan repaid. The insurance will provide adequate amount to the dependents at the early death of the property-owner to pay off the unpaid loans. Similarly, the mortgagee gets adequate amount at the destruction of the property. iii. Life insurance provides profitable Investment: Individuals unwilling or unable to handle their own funds have been pleased to find an outlet for their investment in life policies. Endowment policies, multipurpose policies, deferred annuities are certain better form of investment. The elements of investment i.e. regular saving, capital formation, and return of the capital along with certain additional return are perfectly observed, in life insurance. In India the insurance policies carry a special exemption from income-tax, wealth tax, and gift tax and estate duty. An individual from his own capacity cannot invest regularly with enough of security and profitability. The life insurance fulfils all these requirements with a lower cost. The beneficiary of the policy holder can get a regular income from the life insurer; if the insured amount is left with him. iv. Life Insurance encourages saving: The elements of protection and investment are present only in case of life insurance. In property insurance, only protection element exists. In most of the life policies elements of saving predominates. These policies combine the programs of insurance and savings. v. Life Insurance fulfils the needs of a person: The needs of a person are divided into, (a) Family needs, (b) Old – age needs, (c) Readjustment needs, (d) Special needs, (e) The clean-up needs. (a) Family Needs: Death is certain, but the time is uncertain. So, there is uncertainty of the time when the sufferings and financial stringencies may be fall on the family. Moreover, every person is responsible to provide for the family. Therefore, the provision for children up to their reaching earning period and for widow up to long life should be made. Any other provision except life insurance will not adequately meet this financial requirement of the family. Whole life policies are the better means of meeting such requirements. (b) Old-age needs: The provision for old-age is required where the person is surviving more than his earning period. The reduction of income in old-age is serious to the person and his family. If no other family member starts earning, they will be left with nothing and if there is no property, it would be more piteous state. The life insurance
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provides old age funds along with the protection of the family by issuing various policies. (c) Re-adjustment Needs: At the time of reduction in income whether by loss of unemployment, disability, or death, adjustment in the standard of living of family is required. The family members will have to be satisfied with meagre income and they have to settle down to lower income and social obligations. Before coming down to the lower standard and to be satisfied with that, they require certain adjustment income so that the primary obstacles may be reduced to minimum. The life insurance helps to accumulate adequate funds. (d) Special Needs: There is certain special requirement of the family which is fulfilled by the earning member of the family. If the member becomes disable to earn the income due to old age or death, those needs may remain unfulfilled and the family will suffer. ? Need for Education ? Marriage ? Insurance needs for settlement of children (e) Clean-up funds: After death, ritual ceremonies, payment of wealth taxes and income taxes are certain requirements which decrease the amount of funds of the family member. Insurance comes to help for meeting these requirements. Multipurpose policy, education and marriage policies , capital redemption policies are the better policies for the special needs.
Uses to business: The insurance has been useful to the business society also. Some of the uses are discussed below: (i) Uncertainty of business losses is reduced: In the world of business, commerce and industry a huge number of properties are employed. With a slight slackness or negligence, the property may be turned into ashes. The accident may be fatal not only to the individual or property but to the third party also. New construction and new establishment are possible only with the help of insurance. Business – efficiency is increased with insurance: When the owner of a business is free from botheration of losses, he will certainly devote much time to the business. The care free owner can work better for the maximisation of the profit. The new as well as old businessmen are guaranteed payment of certain amount with the insurance policies at the death of the person; at the damage, destruction or disappearance of the property or goods.
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(ii)
(iii)
Key Man Indemnification: Key man is that particular man whose capital, expertise, experience, energy, ability to control, goodwill and dutifulness make him the most valuable asset in the business and whose absence will reduce the income of the employer tremendously and up to that time when such employee is not substituted. The death or disability of such valuable lives will, in many instances, prove a more serious loss than that by fire or any hazard. The potential loss to be suffered and the compensation to the dependents of such employee require an adequate provision which is met by purchasing adequate life policies. The amount of loss may be up to the amount of reduced profit, expenses involved in appointing and training, of such persons and payment to the dependents of the man. The Term Insurance Policy or Convertible Term Insurance Policy is more suitable in this case. Enhancement of credit: The business can obtain loan by pledging the policy as collateral for the loan. The insured persons are getting more loans due to certainty of payment at their deaths. The amount of loan that can be obtained with such pledging of policy, with interest thereon will not exceed the cash value of the policy. In case of death, this value can be utilised for setting of the loan along with the interest. If the borrower is unwilling to repay the loan and interest, the lender can surrender the policy and get the amount of loan and interest thereon repaid. The redeemable debentures can be issued on the collateral of capital redemption policies. The insurance properties are the best collateral and adequate loans are granted by the lenders. Business Continuation: In any business particularly partnership business may discontinue at the death of any partner although the surviving partners can restart the business, but in both the cases the business and the partners will suffer economically. The insurance policies provide adequate funds at the time of death. Each partner may be insured for the amount of his interest in the partnership and his dependents may get that amount at the death of the partner. With the help of property insurance, the property of the business is protected against disasters and the chance of disclosure of the business due to the tremendous waste or loss. Welfare of Employees: The welfare of employees is the responsibility of the employer. The former are working for the latter. Therefore the latter has to look after the welfare of the former which can be provision for disability and provision for old age.
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(iv)
(v)
(vi)
These requirements are easily met by the life insurance, accident and sickness benefit and pensions which are generally provided by group insurance. The premium for group insurance is generally paid by the employer. This plan is the cheapest form of insurance for employers to fulfil their responsibilities. The employees will devote their maximum capacities to complete their jobs when they are assured of the above benefits. The struggle and strife between employees and employer can be minimised easily with the help of such schemes. Uses to society: Some of the uses of insurance to society are discussed in the following sections: (i) Wealth of the society is protected: The loss of a particular wealth can be protected with the insurance. Life insurance provides loss of human wealth. The human material, if it is strong, educated and care free, will generate more income. Similarly, the loss of damage of property at fire, accident, etc. can be well indemnified by the property insurance; cattle, crop, profit and machines are also protected against their accidental and economic losses. With the advancement of the society, the wealth or the property of the society attracts more hazardous and, so new types of insurance are also inverted to protect them against the possible losses. Each and every member will have financial security against old age, death, damage, destruction and disappearance of his wealth including the life wealth. Through prevention of economic losses, instance protects the society against degradation. Through stabilization and expansion of business and industry, the economic security is maximised. The present, future and potential human and property resources are well-protected. The children are getting expertise education, working classes are free from botheration and older people are guiding at ease. The happiness and prosperity are observed everywhere with the help of insurance. Economic growth of the country: For the economic growth of the country, insurance provides strong hand and mind, protection against the loss of property and adequate capital to produce more wealth. The agriculture will experience protection against losses of cattle, machines, tools and crop. This sort of protection stimulates more production in agriculture, in industry, the factory premises, machines, boilers and profit insurances provide more confidence to start and operate the study welfare of employees create a conductive atmosphere to work. Adequate capital from insurers accelerates the production cycle.
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(ii)
Similarly in business, too, the property and human material are protected against certain losses; capital and credit are expanded with the help of insurance. Thus, the insurance meets all the requirements of the economic growth of a country. (iii) Reduction in Inflation: The insurance reduces the inflationary resources in two ways. First, by extracting money in supply to the amount of premium collected and secondly, by providing sufficient funds for production narrow down the inflationary gap. With reference to Indian context it has been observed that about 5.0 per cent of the money in supply was collected in form of premium. The share of premium contributed to the total investment of the country was about 10.0 per cent. The main two causes of inflation, namely, increased money in supply and decreased production are properly controlled by insurance business, Insurance Need and Selling. Insurance companies in India In India there are so many insurance companies in public sector and private sector: Public Sector
?
Government of India Fully owns 1 company: Life Insurance Corporation of India Private Sector
? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
AEGON Religare Life Insurance Aviva Life Shriram Life Insurance Bajaj Allianz Life Insurance Bharti AXA Life Insurance Co Ltd. Birla Sun Life Insurance Canara HSBC Oriental Bank of Commerce Life Insurance Star Union Dai-ichi Life Insurance DLF Pramerica Life Insurance Edelweiss Tokio Life Insurance Co. Ltd Future Generali Life Insurance Co Ltd HDFC Standard Life Insurance Company Limited ICICI Prudential IDBI Federal Life Insurance IndiaFirst Life Insurance Company ING Vysya Life Insurance
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? ? ? ? ? ? ?
Kotak Life Insurance Max Life Insurance PNB MetLife India Life Insurance Reliance Life Insurance Company Limited Sahara Life Insurance SBI Life Insurance Company Limited TATA AIG Life Insurance
Insurance sector and India Insurance is a subject listed in the Union list in the Seventh Schedule to the Constitution of India where only centre can legislate. The insurance sector has gone through a number of phases by allowing private companies to solicit insurance and also allowing foreign direct investment of up to 26%(as of 2013 there have been proposals to extend the FDI up to 49% to strengthen the Insurance Market even further) the insurance sector has been a booming market. However, the largest life-insurance company in India is still owned by the government. Insurance is a big and one of the most rapidly growing sectors in India. It?s the prime reasons why leading market players are attracted to the Indian insurance market for business expansion. The Confederation of Indian Industry indicates that it has recorded instant and steady growth with a record growth rate of 32% to 34%. India has the largest number of life insurance policies in the world which is great news for the leading insurance companies in India. India?s state owned life insurance corporation (LIC) leads the life insurance sectors in India. The Indian Life Insurance industry is one on the strongest growing sectors in the country. Currently a US$ 41-billion industry, India is the fifth largest life insurance market and growing at a rapid pace of 32-34% annually. Today there are 24 life insurance companies operating in India. Despite all these facts and figures, around 80% of Indian population doesn?t have life insurance coverage. Amongst these 80% people most of them don?t have any kind of life coverage, while some of them do have some sort of health insurance and other non-life insurance policies. People, who don?t have insurance coverage in India, belong to socially and economically weaker strata with lack of pension and social security systems. This is a great opportunity to the insurers to expand their reach throughout all the strata of Indian society.
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Insurance regulatory authority Insurance laws and regulations in India takes care of all matters related to various insurance companies in the country. Much of the development and growth of the insurance sector in India is due to the government's decision to nationalize the insurance business and to allow private and foreign insurance companies to establish their businesses here. In India, there is one regulatory authority i.e. IRDA which oversees different functioning of the life insurance companies in India and provide them with guidelines. Insurance Regulatory and Development Authority (IRDA) Insurance Regulatory and Development Authority (IRDA) is the controlling body, overseeing important aspects and functioning of various insurance companies in India. Established by the government, it safeguards the interest of the insurance policy holders of the country.
i. ii. iii. iv. v.
Some of IRDA's functions include: To regulate, ensure and promote the orderly growth of the insurance business, To prescribe regulations on the investment of funds by insurance companies, To regulate the maintenance of the margin of solvency, To adjudicate the disputes between insurers and intermediaries, To supervise the functioning of the Tariff Advisory Committee
Other supporting organisations which facilitate in the working of the industry: 1. Tariff Advisory Committee The main task of Tariff Advisory Committee is to regulate and control the rates, benefits, terms and conditions offered by life insurance companies in India.
2. Insurance Association of India All insurance companies in India are members of the Insurance Association of India. It has two councils under its patronage, mainly a. Life Insurance Council b. General Insurance Council
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3. Ombudsmen Ombudsmen play important role in regulating and ensuring smooth functions of the insurance companies. They are appointed to address all complaints relating to settlements of claims. Anyone having a grievance against an insurance company can approach Ombudsmen for redressal.
1.7 Market share of life insurance companies in India
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Comparison of insurance companies on the basis of no. of policies sold. (Top Life Insurance Companies)
Number of Policies Up to Dec 2011 20404281 785938 698109 640483 589855 491927 405662 397408 199275 161910 109614 100216 100143 98904 82037 73490 69151 47322 45833 44899 43929 38498 36228 1968
Life Insurance Companies LIC ICICI Prudential Reliance Life Bajaj Allianz Birla Sunlife SBI Life Max New York HDFC Standard Tata AIG ING Vysya Kotak Mahindra Old Mutual Aviva Future Generali Life Met Life Star Union Dai-ichi Shriram Life BhartiAxa Life AegonReligare IDBI Federal Canara HSBC OBC Life DLF Pramerica IndiaFirst Sahara Life Edelweiss Tokio
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RESEARCH REPORT
I did my research on different factors which affects the life insurance market and investment market. This research report is totally depends on online survey through surveymonkey.com. My respondents are mostly at the age group of 21year to 35year and both the gender of different group. Objective of research To know the interest of young generation towards life insurance. To know the interest in life insurance among different income group. Mission Development of life insurance market among young generation, and making insurance product according to preference group. Research Mythology Data sample is young generation people of age 21year to 35 year of different income group and different educational qualification. Population All young generation people of age 21year to 35 year. Scope Development of insurance business and set the actual target segment.
I. II.
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QUESTIONNAIRE Survey on investment market and garment preference 1. I. II. III. IV. Qualification Under Graduate Graduate Postgraduate Professional education
2. Sex I. Male II. Female 3. Marital Status I. Married II. unmarried 4. I. II. III. IV. 5. I. II. III. IV. Annual Income 200000-400000 400000-600000 600000-800000 800000-1000000+ Occupation Job Business Student Other 6. Your monthly savings are.... 10000-20000 20000-40000 40000-60000 60000-80000 7. Do you intend to invest in future? Yes No 8. Which types of garments you use? Branded Local Not-specified
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I. II. III. IV.
I. II.
I. II. III.
9. Which one is your favorite brand? ………………………………………………………………………………..
I. II. III. IV. V. VI. VII.
10. Where do you want to invest? Fixed Deposit Life Insurance General Insurance Ulips Shares Mutual Fund Term Plan www.surveymonkey.com/s.aspx?PREVIEW_MODE=DO_NOT_USE_THIS_L INK_FOR_COLLECTION&sm=pdK7u59WmTlW713j5f730Rh Powered by SurveyMonkey Check out our sample surveys and create your own now !
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My survey report ANNAUAL INCOME & INVESTMENT PREFERENCE
12 no if respondent 10 8 6 4 2 0 0 1 2 Ammual Income 3 4 0 1 2 5 6 7
Age Bar:- 21 year to 35 year
Index CODE 0 1 2 5 6 7
INVESTMENT PREFERENCE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2 3 4
Annual income Not respondent 200000 - 400000 400000 – 600000 600000 – 800000 800000–1000000+
This survey report gives the relationship between annual income and investment preference of respondent. 33.33% of total respondent are not interested on any investment proposal. Most of the respondent are interested to invest on fixed deposit that is 33.33% and 14.00% are interested on life insurance. Rest 20% respondent are interested on all other investment policies. On the basis of annual income those respondent whose income level is Rs 200000 – 400000 are mostly interested to investment rather than high income group, they are equally interested to invest on fixed deposit and life insurance. And the income group 400000 – 600000 is responds for fixed deposit and term plan only. If we target the people of annual income level 200000 – 400000 for life insurance it is better for the insurance market.
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GENDER & INVESTMENT PREFRENCE
20 No of respondent 15 10 16 15 5 2 1 0 0 1 Gender 2 5 6 3 2 1 3 3 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7
Age Bar:- 21 year to 35 year
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2
Gender Not respondent Male Female
This is the investment preference report according to gender. Mostly male respondent are interested in investment, they are interested to invest in all investment profile. Male respondent are mostly respond to invest in fixed deposit i.e. 32%. They are also interested in life insurance and share as well. Female respondent have similar response for both fixed deposit and life insurance that is 42.86% of female respondent. So if our target people are female then we can target for both fixed deposit and life insurance equally. If our target people are male then we can target for all investment proposals but fixed deposit is mostly preferable then share and life insurance.
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INVESTMENT PLANNING IN FUTURE & INVESTMENT PREFRENCE
16 14 12 10 8 6 4 2 0 no. of respondent
0 1 14 5 7 2 0 investment planning 1 1 12 6 5 3 2 2 5 6 7
Age Bar;- 21 year – 35 year
Index CODE 0 1 2 5 6 7
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1
Investment planning No Yes
73.68% respondent have the plan to invest in future, but 33% of them don?t have any idea that where have to invest. Most of them are interested to invest in fixed deposit. Approx 14% and 12% respondent are prefer to invest in life insurance and share respectively, some other are also interested in mutual funds and term plane. Three fields of investment marketing are mostly like by the respondent i.e fixed deposit, life insurance and shares but the loved fixed deposit. It is the great opportunity for the life insurance market to grow in this field.
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MARITAL STATUS & INVESTMENT PREFRENCE
18 16 14 12 10 8 6 4 2 0
No. of responce
0 1 16 13 2 1 0 4 2 1 1 marrital status 1 7 6 2 2 2 2 5 6 7
Index CODE Code MARRITAL STATUS 0 Not respondent 1 Married 2 Unmarried 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Half of the marred respondents are not interested to invest anywhere, some of them are willing to invest but their first preference is fixed deposit then life insurance and share as well as. Unmarred respondent are interested to invest in all investment propositions but 34.78% of unmarred respondent are prefer to invest in fixed deposit, 15.22% are in life insurance, 13% are in shares and rest 8.70% are equally interested in mutual funds and term plans. We can target unmarried people for fixed deposit but we also can target them for life insurance.
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MONTHLY SAVINGS & INVESTMENT PREFRENCE
12 No. of respondent 10 8 6 4 2 0 0 1 2 monthly saving 3 4 7 4 22 11 10 7 43 12 1 2 1 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7
INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane
Code 0 1 2 3 4
Monthly saving Not Respondent 100000 – 200000 200000 – 400000 400000 – 600000 600000 – 800000
This is the survey among the people on the basis of their monthly savings and their investment preference. 45.61% respondents are not responding their monthly savings but they are responding their investment preference. 19.30% respondents are willing to invest on fixed deposit while they do not want to respond on their savings. And 7% prefer to invest on life insurance. 3.5% respondents are also preferred to invest on shares & mutual funds. Respondents with monthly savings Rs 10000 to 20000 are mostly interested on different investment proposal, 12.30% respondents are preferred fixed deposit, 7% are on life insurance, 5.26% are on shares, 1.75% is on mutual funds and 3.5 % are on term plan. In other group of monthly savings respondents are not much interested on investment.
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QUALIFICATION & INVESTMENT PREFRENCE
10 no of respondent 8 6 4 2 11 0 0 1 2 Qualification 3 4 1 12 9 9 5 4 5 3 11 3 212 4 1 1 0 1 2 5 6 7
Index CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Qualification 1 2 3 4 Undergraduate Graduate Post Graduate PROFESSIONAL EDUCATION
Most of the under-graduate respondents are interested in fixed deposit, while graduate people are prefer in all plans. In most of the slots fixed deposit bar is longer than other while Post graduate people (mostly MBAs) are not interested in fixed deposit. Its means most of the people are interested in fixed deposit and there second preference is life insurance. So we can target every people for life insurance without bothering about their qualification.
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ANNUAL INCOME, PREFRENCE
10 8 6 4 2 221 0 0 0 1 0 1 1 1 1 12 9 7 6 5 4 21
MONTHALY
SAVING
&
INVESTMENT
0 1 2 5 1 3 21 1 2 2 1 2 1 0 2 1 3 1 3 0 4 1 1 4 6 7
Age Bar:- 21 year to 35 year
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Annual income (lower) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000 Code (upper) 0 1 2 3 4 5 Monthly saving Not respondent 10000-20000 20000-40000 40000-60000 60000-80000 80000-100000
The table shows that most of the respondent who belongs to income group 200000 – 400000 and their monthly savings are 10000 – 20000 are interested in different investment proposal, most of them are interested in fixed deposit and then life insurance, share and mutual funds respectively. In other group of respondent are not so much of interested in investment marketing. So we can target on this group of people for life insurance. To target on this group we have to formulate the insurance plan on the basis if these people. Premiums should not as much that it is difficult to pay for them. It must be optimal level, premium should not be very high and it gives good return on investment.
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GENDER, QUALIFICATION & INVESTMENT PREFRENCE
10 8 6 4 2 1 0 0 0 2 0 1 2 1 3 4 2 3 2 4 2 1 1 12 9 6 333 11 3 112 5 3 1 121 1 11 0 1 2 5 6 7
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (upper) 1 2 3 4 Qualification Undergraduate Graduate Post Graduate Professional education Code (lower) 0 1 2 Gender Not respondent Male Female
This is the survey report on the basis of gender, qualification and their investment preference. We can see that most of the under graduate male respondents are likely to invest in fixed deposit (15.79%). This might be the possibilities of lack of knowledge about other investment propositions. Graduate male respondents are equally interested to invest their money in different fields of investment, fixed deposit, life insurance and shares (5.26%). Male people are more interested on investment especially graduate people so we can target them for any investment proposal. If our target people are females then it is better that to target for life insurance.
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ANNUAL INCOME, GENDER & INVETMENT PREFRENCE
8 7 no of respondent 6 5 4 3 2 1 0 0 1 0 2 1 1 2 1 2 2 0 1 3 2 1 4 11 7 6 3 11 7 6 4 2 1 2 1 2 2 1 2 1 1 2 1 11 0 1 2 5 6 7
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code Gender (upper) 0 1 2 Not respondent Male Female Code Annual income (lower) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000
This survey is done on the basis of annual income, gender and there investment preference. The table shows that respondents are prefer to invest in fixed deposit and then life insurance and shares. Mostly 200000 to 600000 income group people are interested in investment rather than high income group people. Male people of lower income group should be targeted for fixed deposit and life insurance, and female people of lower income group should be targeted for life insurance. So we will target both male and female people of lower income group for life insurance. Higher income group people are not interested in life insurance they are mostly interested on fixed deposit, share and mutual funds.
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MARITAL STATUS, ANNUAL INCOME & INVESTMENT PREFRENCE
9 8 7 6 5 4 3 2 1 0 0 0 3 0 1 2 1 3 4 0 1 2 2 3 4
0 1 2 5 6 7
Index
Code (upper) 0 1 2 3 4 Annual income Not respondent 200000-400000 400000-600000 600000-800000 800000-1000000 CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code MARRITAL (lower) STATUS 0 1 2 Not respondent Married Unmarried
This survey shows that married people of lower income group (200000 – 400000) are interested on life insurance and the income group (400000 600000) are interested on fixed deposit. Unmarried people of income group (200000-400000) are mostly interested on fixed deposit and then in life insurance while the other income group of unmarried people are not interested on life insurance. So if we target the married and unmarried people of lower income group it is batter for the life insurance market.
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QUALIFICATION, ANNUAL INCOME & INVESTMENT PREFRENCE
7 6 6 5 4 4 3 3 2 22 1 11 0 0 0 0 1 1 4 0 1 2 2 3 0 1 3 4 0 1 4 2 3 1 1 1 1 1 1 1 11 11 111 1 11 11 1 2 2 2 2 2 2 3 3 0 1 2 5 6 7
Index
Code Annual income (upper) 0 Not respondent 1 2 3 4 200000-400000 400000-600000 600000-800000 800000-1000000 CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (lower) 1 2 3 4 Qualification Undergraduate Graduate Post Graduate Professional education
Undergraduate respondent of lower income or no income are willing to invest in fixed deposit mostly, graduate people of lower income are mostly prefer life insurance and then in fixed deposit while post-graduate people are not interested in fixed deposit, they are mostly interested in life insurance, shares and mutual funds. If we were to target for life insurance, we have to target lower income group. They are more willing to invest in life insurance in each slot of qualification. Higher income group people are mostly interested on fixed deposit and mutual funds.
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GENDER, MARITAL STATUS & INVESTMENT PREFRENCE
14 12 10 8 6 4 2 0
No of respondent
1313 0 1 6 21 0 0 321 1 1 4 2 1 Gender & marital status 22 1 1 2 33 2 2 5 6 7
Age Bar:- 21 year to 35 year
Index
CODE 0 1 2 5 6 7 INVESTMENT TYPE Not Interested Fixed Deposit Life Insurance Share Mutual Funds Term Plane Code (upper) 0 1 2 Marital status Not respondent Married Unmarried
Code Gender (lower) 0 Not respondent 1 male 2 Female
42% of married male respondent are not interested in investment, and most of the rest people are interested in fixed deposit. Similarly most of the un-married male respondents are interested in fixed deposit and than in share, life insurance, mutual funds and term plans. Un-married female respondent are prefer to invest in fixed deposit and life insurance as well as. After analyzing these results we can say that fixed deposit and life insurance market will be more grooming market. Unmarried male people are also interested in share market. Fixed deposit and insurance are the most preferred investment plan for every group of respondent male/female/married/unmarried. Insurance companies have to target on both gender of unmarried people, they are more interested in investment then married people.
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Conclusion
Analysis of findings Most of the respondent are interested in fixed deposit and then in life insurance. 16% respondent (age 21-35year) are interested in life insurance. 95% of them are of lower income group (200000-400000). Higher income group people are not interested on life insurance. Females are mostly interested on life insurance. Lower income group and lower saving group respondent are mostly responds for life insurance. Married respondent are not very much interested on life insurance they are interested on fixed deposit while unmarried respondent (15% of total respondent) are mostly interested on life insurance. If we look on the basis of qualification then mostly graduate respondent are respond for life insurance. Over all we can say that most of the lower income group (200000 - 400000) respondent of graduation qualified, unmarried both male and female are interested on investment in life insurance.
Analysis of objectives of study; The object of research study is to know about the interest of young generation to invest in life insurance sector and the result shows that they are interested in this field, 16% of respondent are interested to invest in life insurance. And second objective is to know the investment preference in life insurance of different income group, I found that 95% of respondent who are interested in life insurance are of lower income (200000 - 400000) group.
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Future Scope of study; This is the broad field of study, I tried to study a part of this vast field and I found lots of result, these results are very useful for business development in future.
Limitations & Constraints of company 1> High Premium; annual premium of any insurance product in Aviva is very high. Minimum annual premium of any product in Aviva is more than Rs 25000 when the premium term is very high such as more than 20 year. This is not appropriate for lower income group. 2> Restricted target market; Aviva is restricted itself to target only in higher income group people while here a broad market of lower income people for insurance market. Recommendations & Suggestions; 1> Annual premium should not be very high it should be appropriate for lower income group. 2> Product line should be broad so that every customer could be investing in life insurance as per their choice and income level.
References / Bibliography; www.avivaindia.com www.surveymonkey.com www.gmail.com www.google.com
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THANK YOU
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doc_204128159.docx