INTRODUCTION : INSURANCE INDUSTRY INDUSTRY PROFILE A thriving insurance sector is of vital importance to every modern economy. Firstly because it encourages the habit of saving, secondly because it provides a safety net to rural and urban enterprises and productive individuals. And perhaps most importantly it generates long- term invisible funds for infrastructure building. The nature of the insurance business is such that the cash inflow of insurance companies is constant while the payout is deferred and contingency related. This characteristic feature of their business makes insurance companies the biggest investors in long-gestation infrastructure development projects in all developed and aspiring nations. This is the most compelling reason why private sector (and foreign) companies, which will spread the insurance habit in the societal and consumer interest are urgently required in this vital sector of the economy. Opening up of insurance to private sector including foreign participation has resulted into various opportunities and challenges in India. 1.1 LIFE INSURANCE MARKET The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 1
Transcript
INTRODUCTION : INSURANCE INDUSTRY
INDUSTRY PROFILE
A thriving insurance sector is of vital importance to every modern economy. Firstly because it
encourages the habit of saving, secondly because it provides a safety net to rural and urban
enterprises and productive individuals. And perhaps most importantly it generates long- term
invisible funds for infrastructure building. The nature of the insurance business is such that the
cash inflow of insurance companies is constant while the payout is deferred and contingency
related.
This characteristic feature of their business makes insurance companies the biggest investors in
long-gestation infrastructure development projects in all developed and aspiring nations. This is
the most compelling reason why private sector (and foreign) companies, which will spread the
insurance habit in the societal and consumer interest are urgently required in this vital sector of
the economy. Opening up of insurance to private sector including foreign participation has
resulted into various opportunities and challenges in India.
1.1 LIFE INSURANCE MARKET
The Life Insurance market in India is an underdeveloped market that was only tapped by the
state owned LIC till the entry of private insurers. The penetration of life insurance products was
19 percent of the total 400 million of the insurable population. The state owned LIC sold
insurance as a tax instrument, not as a product giving protection. Most customers were under-
insured with no flexibility or transparency in the products. With the entry of the private insurers
the rules of the game have changed.
The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the
market in terms of premium income. The new business premium of the 12 private players has
tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, with regard to state owned LIC's
new premium business has fallen
1
Innovative products, smart marketing and aggressive distribution. That's the triple whammy
combination that has enabled fledgling private insurance companies to sign up Indian customers
faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving
device, are now suddenly turning to the private sector and snapping up the new innovative
products on offer.
The growing popularity of the private insurers is evidenced in other ways. They are coining
money in new niches that they have introduced. The state owned companies still dominate
segments like endowments and money back policies. But in the annuity or pension products
business, the private insurers have already wrested over 33 percent of the market. And in the
popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the
customers. The private insurers also seem to be scoring big in other ways- they are persuading
people to take out bigger policies. For instance, the average size of a life insurance policy before
privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers
are ahead in this game and the average size of their policies is around Rs 1.1 lack to Rs 1.2 lack-
way bigger than the industry average.
Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding
the second phase of their expansion plans. No doubt the aggressive stance of private insurers is
already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new
customers.
1.2 INSURANCE TODAY
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N.
Malhotra, was formed to evaluate the Indian insurance industry and recommend its future
direction. The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
With the setup of Insurance Regulatory Development Authority (IRDA) the reforms started in
the Insurance sector. It has became necessary as if we compare our Insurance penetration and per
capita premium we are much behind then the rest of the world. The table above gives the
statistics for the year 2000.
2
With the expected increase in per capita income to 6% for the next 10 year and with the
improvement in the awareness levels the demand for insurance is expected to grow. As per an
independent consultancy company, Monitor Group has estimated a growth form Rs. 218 Billion
to Rs. 1003 Billion by 2008. The estimations seems achievable as the performance of 13 life
Insurance players in India for the year 2002-2003 (up to October, based on the first year
premium) is Rs. 66.683 million being LIC the biggest contributor with Rs. 59,187 million. As of
now LIC has 2050 branches in 7 zones with strong team of 5,60,000 agents
1.3 IMPACT OF GLOBALISATION
While nationalized insurance companies have done a commendable job in extending the volume
of the business, opening up insurance sector to private players was a necessity in the context of
globalization of financial sector. If traditional infrastructural and semipublic goods industries
such as banking, airlines, telecom, power etc., have significant private sector presence,
continuing a state of monopoly in provision of insurance was indefensible and therefore, the
globalization of insurance has been done as discussed earlier. Its impact has to be seen in the
form of creating various opportunities and challenges.
The introduction of private players in the industry has added colours to the dull industry. The
initiatives taken by the private players are very competitive and have given immense competition
to the on time monopoly of the market LIC. Since the advent of the private players in the market
the industry has seen new and innovative steps taken by the players in the sector. The new
players have improved the service quality of the insurance. As a result LIC down the years have
seen the declining in its career. The market share was distributed among the private players.
Though LIC still holds 75% of the insurance sector the upcomin1g nature of these private
players are enough to give more competition to LIC in the near future. LIC market share has
decreased from 95%(2002-03) to 81% (2004-05). The following company holds the rest of the
market share of the insurance industry.
3
S.NO NAME OF COMPANY MARKET SHARE (%)
1 LIC 82.3
2 ICICI PRUDENTIAL 5.63
3 BIRLA SUN LIFE 2.56
4 BAJA ALLIANZ 2.03
5 SBI LIFE 1.80
6 RELIANCE LIFE INSURANCE 1.36
7 TATA AIG 1.29
8 MAX NEW YORK 0.90
9 AVIVA 0.79
10 OM KOTAK MAHINDRA 0.51
11 ING VYASA 0.37
12 AMP SANMAR 0.26
13 METLIFE 0.21
1.4 PRESENT SCENARIO OF GLOBALISATION
In a tough battle to expand market shares the private sector life insurance industry consisting of
14 life insurance companies at 26% have lost 3% of market share to the state owned Life
Insurance Corporation(LIC) in the domestic life insurance industry in 2006-07. According to the
4
figures released by Insurance Regulatory & Development Authority, the total premium of these
14 companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.
LIC with a total premium mobilisation of Rs 55,934 crore has been able to retain a market share
of 74.26 % during the reporting period. In total the life insurance industry in first year premium
has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a
few surprises in the ranking among the private sector life insurance companies. New entrants like
Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively
during the year. Reliance Life which has become one of the top five companies ended the year
with a premium of Rs 930 crore during the year.
Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance
company during the year. Bajaj Allianz overtook ICICI Prudential in terms of monthly market
share in March, for the first time ever. Bajaj's market share among private players in non-single
premium for March stood at 29.1% vs. ICICI Prudential's 23.8%. Bajaj gained 4.6 percentage
point market share among private sector players for FY07.
Among other private players, SBI Life and Reliance Life continued to do well, each gaining 4%
market share in FY07. SBI Life's growth was driven by increasing contribution from ULIP
premiums. Another notable developments of the 2006-07 performance has been the expansion of
retail markets by the life insurance comapnies. Bajaj Alliannz Life insurance has added 20 lack
policies while ICICI Prudential has expanded over 19 lack policies during the year.
With the largest number of life insurance policies in force in the world, Insurance happens to be
a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and
presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per
cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds
available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover while health
insurance and non-life insurance continues to be below international standards. And this part of
the population is also subject to weak social security and pension systems with hardly any old
5
age income security. This itself is an indicator that growth potential for the insurance sector is
immense.
A well-developed and evolved insurance sector is needed for economic development as it
provides long term funds for infrastructure development and at the same time strengthens the risk
taking ability. It is estimated that over the next ten years India would require investments of the
order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in
infrastructure development to sustain economic growth of the country.
Insurance is a federal subject in India. There are two legislations that govern the sector- The
Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has become a full
circle from being an open competitive market to nationalisation and back to a liberalised market
again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn
witnessed over a period of almost two centuries.
1.5 IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS
IN INDIA
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.`
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalised. LIC formed by an Act of Parliament- LIC Act 1956- with a capital
contribution of Rs. 5 crore from the Government of India.
6
In a tough battle to expand market shares the private sector life insurance industry consisting 14
life insurance companies at 26% have lost 3% of market share to the state owned Life Insurance
Corporation(LIC) in the domestic life insurance industry in 2006-07. According to the figures
released by Insurance Regulatory & Development Authority the total premium these 14
companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.
LIC with a total premium mobilisation of Rs 55,934 crore has been able retain a market share of
74.26 % during the reporting period. In total the life insurance industry in first year premium has
grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a few
surprises in the ranking among the private sector life insurance companies. New entrants like
Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively
during the year. Reliance Life which has become one of the top five companies ended the year
with a premium of Rs 930 crore during the year.
Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance
company during the year Bajaj Allianz overtook ICICI Prudential in terms of monthly market
share in March, for the first time ever. Bajaj's market share among private players in non-single
premium for March stood at 29.1% vs. ICICI Prudential's 23.8%. Bajaj gained 4.6 percentage
point market share among private sector players for FY07.. Among other private players, SBI
Life and Reliance Life continued to do well, each gaining 4% market share in FY07. SBI Life's
growth was driven by increasing contribution from ULIP premiums. Another notable
development of the 2006-07 performance has been the expansion of retail markets by the life
insurance companies. Bajaj Alliannz Life insurance has added 20 lack policies while ICICI
Prudential has expanded over 19 lack policies during the year.
7
1.6. INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
M I S S I O N
To protect the interests of the policyholders, to regulate, promote and ensure orderly growth of
the insurance industry and for matters connected therewith or incidental thereto.
About IRDA
Composition of Authority under IRDA Act, 1999
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority
8
(IRDA, which was constituted by an act of parliament)
specify the composition of Authority
The Authority is a ten member team consisting of
(a) a Chairman;
(b) five whole-time members;
(c) four part-time members,
(all appointed by the Government of India)
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA..
Subject to the provisions of this Act and the time being in force, the Authority shall have
the duty to regulate, promote and ensure orderly growth of the insurance business and re-
insurance business.
Without prejudice to the generality of the provisions contained in sub-section.
Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration;
Specifying requisite qualifications, code of conduct and practical training for intermediary
or insurance intermediaries and agents;
Specifying the code of conduct for surveyors and loss assessors; Promoting efficiency in
the conduct of insurance business;
Promoting and regulating professional organisations connected with the insurance and
re-insurance business;
Levying fees and other charges for carrying out the purposes of this Act; calling for
information from, undertaking inspection of, conducting enquiries and investigations
including audit of the insurers, intermediaries, insurance intermediaries and other
9
organisations connected with the insurance business; control and regulation of the rates,
advantages, terms and conditions that may be offered by insurers in respect of general
insurance business not so controlled and regulated by the Tariff Advisory Committee
under section 64U of the Insurance Act, 1938 (4 of 1938);
Specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance Intermediaries;
Regulating investment of funds by insurance companies;
Regulating maintenance of margin of solvency;
Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
Supervising the functioning of the Tariff Advisory Committee;
Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organizations.
Specifying the percentage of life insurance business and general insurance business to
undertaken by the insurer in the rural or social sector
10
COMPANY PROFILE : RELIANCE LIFE INSURANCE
2.1 COMPANY PROFILE OF THE ORGANIZATION
Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance -
Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector financial
services companies, and ranks among the top 3 private sector financial services and banking
companies, in terms of net worth. Reliance Capital has interests in asset management and mutual
funds, stock broking, life and general insurance, proprietary investments, private equity and other
activities in financial services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered
with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934.
Reliance Capital sees immense potential in the rapidly growing financial services sector in
India and aims to become a dominant player in this industry and offer fully integrated
financial services.
Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need
based Life Insurance solutions to individuals and Corporates.
Reliance capital entered into the life insurance business by acquiring AMP Sanmar in October
2005. The business was thereafter renamed Reliance Life Insurance. Today RLIC has over 20
products - 16 individual plans and 4 employee benefit plans - including the two new innovative
products – Connect to Life and Reliance Money Guarantee Plan - that were launched recently.
11
Reliance Life Insurance Company (RLIC) has been accorded the ISO 9001-2000 certificate for
its best-in-class management systems in Quality, Customer & Process orientation.
With this, RLIC is one of the only two life insurance companies in India to get ISO 9001:2000
certification covering all functional areas.
The scope of the certification covers the entire gamut of business processes ranging from product
design, sales - front-end and back-end operations, customer care and investment, to all business
support functions. The certification has been awarded by internationally acclaimed Bureau
Veritas and is valid till 2010 subject to continued satisfactory operation of RLIC's Quality
Management System.
"This certification is a significant milestone in our continuous quest to offer innovative products,
outstanding services and improved customer satisfaction. It indicates that we have been able to
install systems, processes & performance measures that are in line with the best in the industry
and will form the basis of our business growth in future", said P Nandagopal, CEO, Reliance
Life Insurance Company.
Reliance Life Insurance is the fastest growing life insurance company in India and has an
incremental market share of 4 per cent amongst private insurers. The company has third largest
distribution network in terms of number of agents operating out of 143 locations across the
country
2.2 CORPORATE OBJECTIVE
At Reliance Life Insurance, we strongly believe that as life is different at every stage, life
insurance must offer flexibility and choice to go with that stage. We are fully prepared and
committed to guide you on insurance products and services through our well-trained advisors,
backed by competent marketing and customer services, in the best possible way.
It is our aim to become one of the top private life insurance companies in India and to
become a cornerstone of RLI integrated financial services business in India.
12
2.3 ACHIEVEMENTS
RLIC has been one of the fast gainers in market share in new business premium amongst
the private players with an incremental market share of 4.1% in the Financial Year 2007-
08 – from 3.9% in April 07 to 8% in Feb 08. ( Source: IRDA)
Also continues to be amongst the fast growing Private Life Insurance Companies with a
YOY growth of 195% in new business premium as of Mar’08.
A Company that has crossed 1.7 Million policies in just 2 years of operation, post take
over of AMP Sanmar business.
Initiated Express Life – an Unique ’Over the Counter’ sales process for Unit Linked
Insurance Policies in the Industry.
Accomplished a large distribution ramp-up in the Industry in a short span of time by
opening 600 branches in 10 months taking the overall branch network above 740.
RLIC continues to be one of the two Life Insurance companies in India to be certified
ISO 9001:2000 for all the processes.
Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificate of Merit in the
Financial Services category by Council for Fair Business Practices (CFBP).
2.4 ORGANIZATIONAL CHART OF RLIC
13
Vision
Empowering everyone live their dreams.
Mission
Create unmatched value for everyone through dependable, effective, transparent and profitable
life insurance and pension plans.
Our Goal
Reliance Life Insurance would strive hard to achieve the 3 goals mentioned below:
Emerge as transnational Life Insurer of global scale and standard
Create best value for Customers, Shareholders and all Stake holders
14
Achieve impeccable reputation and credentials through best business practices
2.5 MARKETING STRATEGIES OF RELIANCE
Marketing Mix Policies
Different companies can choose to position themselves differently and hence the Marketing Mix
is different. However, there are certain common characteristics that one can cull out from the
possible strategies that companies adopt.
Product:
The development of flexible products to suit individual requirements is what will differentiate
the winners from the also-rans. The key to success is in providing insurance solutions, not
standardized insurance products. The concept of riders/optional benefits has already been a huge
innovation brought about by the new players, which has led to customization of products for
individual needs. However, companies may differentiate themselves on the basis of product
segments that they choose to focus on and excel in.
Place:
Different companies may however choose different channels and different geographies to focus
on. The channel options are - tied agency force, corporate agents and brokers and this is an area
where different companies will make different choices. Many companies like HDFC Standard
Life are focusing on all channels whereas companies like Max New York Life are focusing on
the tied agency force only. Customer interface will be a key challenge for life insurance
companies and includes every that interaction that the customer has with the company, such as
sales, new business underwriting, policy servicing, premium payments, claim processing and so
on. Technology can play a crucial role in delivering the highest standards of service set by the
company and it will be imperative for any serious player to excel in all of these
Price:
Price is a relevant differentiator only in two segments - pure term insurance and in pure
annuities. Here too, service delivery and financial strength will need to be present at a minimum
15
acceptable level for price to be a relevant differentiator. In case of savings oriented products,
long-term returns generated are more relevant than just the price of the product. A focus on
generating good investment performance and keeping a tight control on costs help in generating
good long-term maturity value for customers. Norms have been laid down on all of these by
IRDA and adhering to these while delivering good returns will be a challenge.
Promotion and Advertising:
The level of demand is latent and will have to be activated considerably. The market needs to be
developed. Greater awareness of insurance and the need to have it as a protection tool rather than
as a tax planning measure needs to be appreciated by the Indian people. Various communication
tools including advertising, direct marketing and road shows contribute to all this and different
companies take different approaches on these.
Process:
Cashless settlement: One of the most defining and customer-friendly changes that we’ve seen in
recent years relates to the way claims settlements are made. The advent of the third-party
administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless
settlement of health and auto insurance claims. TPAs are entities who process claims on behalf
of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the
trained manpower, the infrastructure and the skills to undertake this activity.
Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for
cashless settlement of auto insurance claims.
Lower premiums: The spirit of competition and the broadening of the risk experience of
insurance companies have contributed to a fall in premiums over the years. That’s because, other
things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an
insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater
efficiencies on costs such as distribution, management and claims. A broad basing of the
mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums,
and that trend is expected to continue.
Premium payment flexibility: Insurers have imparted certain flexibility to premium payment
options in order to address this concern. For instance, one now have the option to pay your
16
premiums upfront, which is then carried forward for the tenure of the policy. The yearly
premiums are drawn from the initial corpus. Insurers have also introduced the concept of
‘automatic cover maintenance’ to protect your policy from lapsing owing to your omission to
pay your premium on time. Under this, in the event of your not paying the premium, the insurer
dips into your investment account to the extent of the premium. Of course, this comes with an in-
built drawback: your investment portion diminishes year on year to the extent of the amount paid
to cover your risk.
PLACE
Place is another marketing mix tool, it includes various activities the company undertakes to
make the product accessible and available to the target customer. This element of marketing mix
can be broken down into two clear categories:
• Distribution channel option.
• Physical distribution.
Distribution channels are the alternative method that might be chosen in making the
product/service available to the customer for purchase. In simple terms the channel of
distribution is where the customer will expect to see, and be able to purchase, the product or
services. It is worthwhile breaking channels of distribution down further into two major areas:
1. Direct distribution: many companies choose to distribute their product directly to their
customers without the use of an intervening organization, known alternatively as an intermediary
or middlemen. Companies opt for this distribution channel because of many reasons, few of them
are-
• Maintaining control over all the elements of marketing mix: this will include the way
the product is presented, its selling price, where the product is offered for sale and how the
product is promoted or sold.
• Cost: whether there are cost saving in the marketing directly rather than indirectly will
depend on the product and market circumstances. Superficially there appears to be a saving as
selling direct eliminates the need to pay a percentage amount, in terms of a reduction on
expected selling price, to the intermediary for undertaking some of the marketing tasks.
• Guaranteed outlet: selling directly to ensure a guaranteed outlet of the company’s
product as there are no intervening bodies between the organization and its customer, refusing to
17
take stock or taking from elsewhere and restricting supply. This can be important because of
growing competition and increased intermediary strength.
• Building customer relation: Dealing direct with the end-customer enables the producer
to communicate and build a very close relationship with the customer.
• Focused, specialized attention: a company selling direct can present its product or
services in concentrated and focused way to the customer unhindered by immediate competitor’s
products.
2. Indirect distribution: many companies choose to use middlemen or intermediaries to bring
their products to the market. An intermediary is an organization or an individual, which acts as a
conduit for product or services delivery, between the producer and the end-customer.
There can be one, or more, intermediaries in the distribution chain from the producer to the end-
customer and may purchase the goods either for resale to end-customer or act as some form of
agent, passing on the product to another intermediary.
RELIANCE LIFE INSURANCE makes its product available to its customer through indirect
distribution network with one level of intermediary involved in the chain. The intermediaries are
known as dealers.. RELIANCE LIFE INSURANCE believes that its relationship with the
customer does not end with the purchase of a product. For its inception, RELIANCE LIFE
INSURANCE was committed to provide an excellent network that would facilitate customer in
purchasing products, and getting their claims
Physical distribution is how the product or services actually gets to the customer, once the
choice of channel has been made. It involves planning, implementing and controlling the
physical flow of goods and services from the organization to the customer efficiently,
Effectively and at the lowest possible cost. Physical distribution can be a very costly process, in
some cases it can be as much as 20% of the total cost, it is an area where
18
many companies have managed to make huge savings and gain competitive advantage by
lowering costs and making savings in the method used.
RELIANCE take physical distribution not as cost but as a way in which company can gain
competitive advantage by offering the customer added benefits, better services or lowering prices
through continuous improvements in the methods used.
Physical distribution is making sure that the requisite goods are available when and where the
customer demands. RELIANCE has set its distribution objective in terms of the task that need to
be performed and relate to the overall sales objectives for the product and the channel outlet
chosen. RELIANCE LIFE INSURANCE has clearly identified and broken down
The amount that will need to be delivered to each outlet or delivery point two meet the agreed
sales objective. RELIANCE LIFE INSURANCE has made its objectives:
Specific
Measurable
Achievable
Realistic
PROMOTION
Promotion is the communication element in the marketing mix and it comes into use only when
the other three P’s, product, price, place, have been developed and coordinated and are ready to
meet the needs of the identified target market.
Because products, customers and markets are complex and different the promotional tasks the
need to be undertaken will also be complex and different necessitating the use of many different
types of communication techniques. These different techniques are called Promotion Mix.
Role That Product, Price & Place Play In Promotion
19
If the product, service or brand promises more customer benefits than actually exist or are
perceived to exist, than the customer will be disappointed after trial and no matter how
aggressive and intensive the advertising, the customer will feel aggrieved and even cheated and
so will not purchase again.
Similarly if the price is too high or too low in relation to the product value, or if the chosen
channel of distribution is not at the level expected, then advertising or sales promotion, which
initially creating interest or even purchase, will find that the customer disappointed will militate
against repeat purchase and might also cause long-term corporate damage.
The product, price and place will also communicate a good or bad message to the customer.
RELIANCE LIFE INSURANCE takes care of certain factors while planning a promotional
campaign. These are as follows:
Promotional objective: RELIANCE LIFE INSURANCE decides the promotion
objective i.e. what does the company wants to achieve through the use of communication
techniques;
Promotion strategies: what major methods will be used & why, to achieve these
objectives. This stage will consist of choosing one or more of the promotional mix
techniques. RELIANCE LIFE INSURANCE limited select the best promotional tools-
advertising, sales promotion, publicity etc to promote its products
Target audience: RELIANCE LIFE INSURANCE limited defines the target audience at
which it is going to aim its messages. This also involves constructive detail customer
profile for the target segment.
Message: The message content and the method of presentation is kept in line with the
product positioning statement.
Promotional Tactics: The promotional strategy is broken down into its constituent parts.
For example if above the line advertising strategy is used then the elements of the media
mix are also selected in details. If below the line sales promotion strategy is place then
various methods like free holidays, incentives are studied in detail.
20
Budget: Amount of money is allotted & promotional budgets every year. In the year
2001-02, Rs. 900 million were spend on advertisements, publicity, sales promotion &
business development.
Feedback, Monitoring & Control mechanisms: Feedback, Monitoring & Control
mechanisms are implemented to make certain that agreed promotional objectives
&performance indicators are achieved. This process is operated through the use of some
form of market research.
Integration: Finally all the methods used are integrated in a cohesive, consistent, logical
manner to meet the needs of the target audience.
Promotional mix of RELIANCE LIFE INSURANCE limited
Advertising
Sales promotion
Publicity
Advertising
Any paid form of non personal selling of the company’s product by an identified sponsored is
called as advertisement. Reliance has engaged in many types of advertising campaign which
have successfully helped Reliance India Mobile to get itself established in the Indian
telecommunication society.
Advertising is used by RELIANCE LIFE INSURANCE to
Inform: about the new products launched in the market by RELIANCE LIFE
INSURANCE Limited.
21
Reinforce: give reason (largest service network) why customer should remail with the
brand.
Persuade: customer to buy products.
The media mix is known as “above the line” promotion consists of the major methods
advertising RELIANCE products under the following headings:
Television: it is probably the most recognizable form of advertising. Marketing opportunities
have increased as TV and computers have been combined in the internet and multimedia of
offerings. Television advertising have mass reach, the products are advertised across the whole
country with the potential to reach 95% of the population. No other medium used by RELIANCE
LIFE INSURANCE has the same capability.
Print media: RELIANCE gives print advertising in newspapers, magazines and journals;
RELIANCE uses this medium of advertising less aggressively though it saves a lot of money,
targets accurately.
Cinema: research has shown that there is a clear customer segment that regularly goes to cinema
and it is good media to advertise the product. RELIANCE advertisements are also shown in
premier cinema halls.
Outdoor: outdoor posters are used as reinforcement to the primary medium such as TV or print.
RELIANCE has been extensively using this medium of advertising.
Sales promotion
The second major promotional mix method used by RELIANCE, is the use of sales promotion
also known as “below the line” promotion. Sales promotions are short term incentives used to
boost sales. It takes the form of some kind of extra value that is added to the product for the
period of promotional campaign. The RELIANCE sales promotion strategy is to increase sales,
either overall or on specific models. Most of the schemes of sales promotion are at national level.
Local level scheme are formulated and implemented by regional offices. RELIANCE does its
sales promotion in three different ways:
22
Consumer sales promotion: RELIANCE promotion is usually a short term incentive
that urgently trumpets the message to the consumer ‘buy now rather than later otherwise
it will be too late and the opportunity will be lost. Also customers are offered free
holiday packages to various destinations within and outside India, discount coupons, free
magazines subscription, etc.
Dealer sales promotion: most of the sales promotion schemes are for dealers. Generally
incentives are given to dealers are based on the target achievement.
Finance company sales promotion: RELIANCE gives incentives to finance companies
& financial institutions as subvention on certain models, which they use to incentives
customers.
Publicity: The next major promotional mix technique used by RELIANCE is the use of
publicity. Publicity is any form of planned, unpaid for media exposure that promotes the
company or its products in favorable light. This consists of items of news or stories that
appears in newspapers, magazines and on the television about the organization, their
products, their directors, their employees etc. RELIANCE understands the value of good
publicity. Marketing department of RELIANCE is concerned in using public relations
and publicity as a planned element of the promotion mix specifically to communicate
favorable message to its customer about the organizations existing & new products.
The tool of publicity
The press or news release: the press is probably most widely used by RELIANCE LIFE
INSURANCE for gaining free coverage in the national press. Information is sent to the
newspaper to be printed.
Press and news conference: the news conference is another method of building
relationship and publicity, by RELIANCE. Journalist from both TV and press release are
invited to hear some new development in the organization. After the conference there is
time allowed for question and answer session.
23
Events: RELIANCE plans staging of activity knowing that it will be reported in the
media.
Public service activity: RELIANCE LIFE INSURANCE has been actively involved in
providing medical support and welfare education and training, taking steps towards
conserving energy resources and a host of other activities in the development of a
healthier community life and proving welfare need. RELIANCE LIFE INSURANCE has
been constructing and maintaining roads in Gurgaon.
Exhibitions: an exhibition takes many forms and is seen as a marketplace for both
displaying products & services and as a way of getting producers and customers together.
The mounting of an exhibition includes all the elements of the promotional mix.
RELIANCE takes part in various trade as well as consumer exhibition.
The objective in taking part in exhibition is:
- To build goodwill, inform and educate; and pave the way of future sales.
- To communicate corporate image.
- To meet competitors.
- To make appointments and take sales leads.
Sponsorship: is giving of some form of support, usually money, in return for an
advertising, sales promotion, publicity or sales opportunity. There has been enormous
growth in this media form over the last decades and this look to continue into the future
1. RELIANCE LIFE Insurances a serious sponsor of golf &polo tournaments. The
auto flagship has sponsored the hole-in-one concept in pro-Am Golf Tournament.
2. RELIANCE LIFE Insurances extensively sponsoring various programmes in both
TV as well as Radio.
3. Reliance Life Insurance has been sponsoring various charity shoes. Recently they
had a show for Gujarat Relief Fund.
2.6 MARKETING DEPARTMENT
24
The Marketing Department is responsible for creating a “customer pull” for RELIANCE
products. The main functions of this department are:
Advertising research
Product Advertising and Promotion
Corporate Advertising
Formulating Corporate Identify Guidelines
Organizing sales training for dealers
Organizing exhibitions and rallies
Developing Socially Relevant Campaigns
Providing Support to dealers on advertising, promotion and showroom up-gradation.
2.7 REGIONAL OFFICES
In order to manage the sales and service network, RELIANCE has divided the country into five
regions, which are further into territories. It has five Regional Offices located in Delhi, Bombay,
Calcutta, Chennai and Chandigarh and Area Offices located at Lucknow, Hyderabad & Mumbai.
Each dealership operated in one territory, but does not have exclusive selling rights in the
territory. The dealer is expected to service the entire territory through his dealership.
The Regional Offices (RO) has the primary responsibility of managing, monitoring and
supporting the network in a region. The RO has field staff for sales and services. A Regional
Manager (RM) heads each RO. The sales staff has primary responsibility for all sales related
issues, and report to RM. The services engineering’s look after the workshops in the region, and
report to the Regional Service Representative (RSR).
2.8 BRAND AMBASSADOR OF RLIC
The Indian Insurance Industry seems to have caught the Nike-fever of hiring sports stars as brand
ambassadors. Aviva Life Insurance Company’s brand ambassador is Sachin Tendulkar. Sanmar
AMP Life Insurance Company, which has now been taken over by Reliance Life Insurance
Company, earlier had Australian cricket captain Steve Waugh as its brand ambassador. Sunil
Shetty and Viral Kohli would be the brand ambassadors of RLIC in the year 2010-11.
25
2.9 PRODUCTS OF RELIANCE LIFE INSURANCE
A. Market Return Plan
With Reliance Market Return plan you can have the twin advantage of insurance protection as
well as reaping the benefits of investment growth. It is a flexible plan which works all through
your life and meets the changing requirements like additional protection, liquidity through cash,
option to invest in different asset class, steady golden years and many more.
Key Features – Reliance Market Return Plan:
Twin benefit of market linked return and insurance protection
A Unit Linked Plan, different form traditional Life Insurance products, with maximum
maturity age of 80 years
Option to create your own portfolio depending on your risk appetite
Choose from 4 different investment funds
Flexibility to switch between funds
Option to pay regular as well as single premium & Top-ups
Option to package with Accidental riders
Flexibility to increase the Sum Assured
Liquidity through partial withdrawals
Benefits
Life Cover Benefit: You can choose the basic Sum Assured within the minimum and
maximum levels mentioned below
Minimum Sum Assured:
Regular Premium: Annualized Premium for 5 years or for half the Policy term
Single Premium: 125% of the single premium
Maximum Sum Assured : No Limit (Rs 500,000 for age up to 12 years)
26
In case of unfortunate loss of life, your Beneficiary will get sum Assured or Unit Account Value
whichever is higher.
Maturity Benefit : On survival, at maturity the value of your Unit Account will be paid out
Rider Benefit: You can add the Accidental Death & Accidental Total and Permanent
Disablement Benefit Rider (available only with regular premium option).
This benefit doubles the life coverage in case of accidental death or accidental total and
permanent disablement at a very nominal additional cost. The maximum cover is Rs. 50, 00,000
per life.
B. Money Guarantee Plan
For the select few like you, the Reliance Money Guarantee Plan is a Unit Linked product
addressing comprehensive need to strike that perfect balance of Protection and Savings, that you
deserve as you grow successfully. The Reliance Money Guarantee Plan is a Regular Premium
Unit Linked Policy which guarantees the entire premium (including premiums for top- ups) paid
by you. This is a plan which helps you reap all the benefits of a rising market simultaneously
protecting you from the downside risk of the market.
Key Features
Capital Guarantee The sum of all premiums paid is guaranteed on maturity or on death
before the maturity.
Capital Guarantee is available on both the basic premiums as well as on top-up premiums
Unique Return Shield feature to protect your returns
Choice to invest from 3 pre-packaged investment fund options
Unmatched flexibility through our ‘Exchange Option’ to move between the Reliance
Money Guarantee suite of products offered, as you grow up the ladder
Liquidity in the form of partial withdrawals from top-up fund
27
Option to package with Accidental Death & Disability and Term Insurance riders
The Funds Options are:
a. Funds available in respect of Basic Plan and top-up premium:
The plan offers three funds for Basic Plan and top-ups - Fund D, Fund E and Fund F. You
have the option to decide your own fund mix with respect to premiums under the Basic
Plan and top-ups.
b. Funds available in respect of Return Shield Option:
Return Shield Fund will be available if Return Shield Option is selected. The returns
earned under the Basic Plan and top-ups will be transferred to Return Shield Fund if
Return Shield option is selected.
c. Funds available during settlement period:
If you have opted for the settlement option, then Fund C would apply by default during
the settlement period
C. Reliance Whole Life Plan
You always loved your family. As a loving person you also wanted to be rest assured in the
knowledge that they will be happy, even if something were to happen to you. With Reliance
Whole Life Plan you can be sure that your family will receive that timely financial support they
need. Go ahead, live your today to the fullest without a worry about tomorrow.
Key Features
Insurance protection till age 85
28
Choose to extend your insurance coverage till age 99
Convenient Premium Payment Term Wealth creation through bonus additions
More value for your money by way of High Sum Assured Rebate
Get Sum Assured plus bonuses in case of your unfortunate death
Option to add two riders – Critical Illness and Accidental Death Benefit & Total &
Permanent Disablement Rider
Policy Loan available after three full years’ premium payment
D.Reliance Automatic Investment Plan:
The Key benefits of Reliance Automatic Investment Plan are as follows:
A smart plan which adapts to your changing risk profile with increasing age
Option to lower the average cost of units through systematic transfer of your funds
Flexibility to switch between funds and plans
Options for additional Insurance cover available through riders
Key Features Reliance Automatic Investment Plan
Two plan options to choose from Ready-made and Tailor-made
Life Stage asset allocation to ensure automatic change in investment patterns, under the
Ready-made Plan option
Freedom to decide your own fund mix based on your risk profile under the Tailor-made
Plan
Regular, limited, single premium paying options
Unmatched flexibility through our ‘Exchange Option’
Liquidity in the form of partial withdrawal
Option to avail of Accidental Death Benefit, Accidental Total, Premium Disability and
Term Insurance riders
E. Reliance Golden Year Plan:
29
The Reliance Golden Years Plan Value gives you the right kind of solution. A retirement plan
that allows you to save systematically to generate a much needed corpus to make your olden
years look golden.
UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS
BORNE BY THE POLICYHOLDER.
Key Features
Invest systematically and secure your golden years
Four different investment funds to choose from
Flexibility to advance your Vesting Age
Tax free commutation of up to one third of fund value at vesting age
Life cover and optional Accidental rider
F. RELIANCE ENDOWEMENT PLAN:
Reliance Endowment Plan gives you just the financial independence to realize your dreams in
the future. It lets you decide how much you would like to set as your sum assured based on your
current financial position and your expected future expenses.
Key Features:
On maturity receive Sum Assured plus bonuses
Wealth creation through bonus additions
More value for your money by way of High Sum Assured Rebate
Increase your insurance protection by adding Term Cover
Choose to pay regular or single premium
Choose to add the benefit of two riders - Critical Illness Rider and Accidental Death
Benefit & Total and Permanent Disablement Rider
Choose to avail of a Policy Loan after three full years’ of premium payment
30
Benefits:
Maturity Benefit: On maturity you get Sum Assured plus accumulated bonuses (if any) till that
date.
Life Cover Benefit: In the unfortunate event of loss of life, your family will receive the Sum
Assured plus accumulated bonuses (if any) till that date.
Rider Benefit: You also have the option to add three additional benefits to customize the Policy
as per your needs for the regular premium plan
a. Term Life Insurance Benefit Rider
b. Accidental Death Benefit & Total and Permanent Disablement Rider
c. Critical Illness Rider
Term Life Insurance Benefit Rider:
Add the advantage of the Term Life Insurance Benefit rider to your basic Policy and increase
risk coverage. In the event of unfortunate loss of life the Term Life Insurance Benefit is payable
and the amount payable is equal to the rider Sum Assured. There is no Maturity Benefit.
Term Insurance
Minimum / Maximum Age at
entry 18 / 59
Maximum Age at expiry 64 yrs (policy anniversary immediately following age)
Sum Assured Rs 1,00,000 Equal to basic policy sum assured
Policy Term Equal to basic policy term
Minimum Policy Term: 5 years
31
Maximum Policy Term: Regular Premium - 35 years (Single)
Premium 15 years
The Policy Term:
Minimum Policy Term: 5 years
Maximum Policy Term: Regular Premium – 35 years (Single)
Premium 15 years
Entry age:
Minimum age at
entry: 5 years
Maximum age at
entry:65 years
Minimum age at
maturity:18 years
Maximum age at
maturity:75 years
The Sum Assured:
Minimum Sum
Assured:
Regular Premium – Rs 25,000 For
Single
Premium it is
determined by the minimum premium
Maximum Sum
Assured:Entry age below 18 years - Rs 5,00,000
Entry age 18 years and
above No Limit
32
Surrendering the policy:
You have the option to Surrender your Policy and receive the Surrender Value. If your Policy
has accumulated any bonuses, then you will also receive the cash value of that total amount upon
surrendering your Policy. Your single premium plan acquires a surrender value as soon as you
pay your premium. We guarantee a minimum surrender value of 70% of the single premium paid
excluding any extra premium plus the cash surrender value of any vested bonuses.
Your regular premium plan acquires a surrender value after 3 years’ premium has been paid and
after three years have elapsed from date of commencement of Policy. We guarantee a minimum
surrender value of 30% of the total premiums paid (excluding any extra premiums and premiums
for additional benefits) subsequent to the first year premium, plus the cash surrender value of any
vested bonuses. On surrender, the insurance protection provided under the policy will also cease.
2.10 COMPETITION INFORMATION
1. HDFC Standard Life Insurance Company Ltd.
HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance
companies, which offers a range of individual and group insurance solutions. It is a joint venture
between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading
housing finance institution and The Standard Life Assurance Company, a leading provider of
financial services from the United Kingdom. Their cumulative premium income, including the
first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005.
They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have
been covered through our group business tie-ups.
2. Max New York Life Insurance Co. Ltd.
33
Max New York Life Insurance Company Limited is a joint venture that brings together two large
forces - Max India Limited, a multi-business corporate, together with New York Life
International, a global expert in life insurance. With their various Products and Riders, there are
more than 400 product combinations to choose from. They have a national presence with a
network of 57 offices in 37 cities across India.
3. ICICI Prudential Life Insurance Company Ltd.
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier
financial powerhouse and Prudential plc, a leading international financial services group
headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector
insurance companies to begin operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). The company has a network of about
56,000 advisors; as well as 7 bank assurance and 150 corporate agent tie-up
4. Om RELIANCE Mahindra Life Insurance Co. Ltd.
RELIANCE Mahindra Old Mutual Life Insurance Ltd. is a joint venture between RELIANCE
Mahindra Bank Ltd. (KMBL), and Old Mutual plc.
5.Birla Sun Life Insurance Company Ltd.
Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life
financial Services of Canada.
6.SBI Life Insurance
SBI Life Insurance is a joint venture between the State Bank of India and BNP Paribas
Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores and a
34
Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP Paribas
Assurance the remaining 26%.
State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate
Banks, SBI Group has the unrivalled strength of over 14,500 branches across the country,
arguably the largest in the world. BNP Paribas Assurance is the insurance arm of BNP Paribas -
Euro Zone’s leading Bank. BNP Paribas, part of the world's top 10 group of banks by market
value and part of Europe top 3 banking companies, is one of the oldest foreign banks with a
presence in India dating back to 1860. BNP Paribas Assurance is the forth largest life insurance
company in France, and a worldwide leader in Creditor insurance products offering protection to
over 50 million clients. BNP Paribas Assurance operates in 42 countries mainly through the bank
assurance and partnership model.
SBI Life has a unique multi-distribution model encompassing Bank assurance, Agency and
Group Corporates.
SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products
along with its numerous banking product packages such as housing loans and personal loans.
SBI’s access to over 100 million accounts across the country provides a vibrant base for
insurance penetration across every region and economic strata in the country ensuring true
financial inclusion.
7. Allianz Bajaj Life Insurance Company Ltd.
Bajaj Allianz Life Insurance Company Limited is a Union between Allianz SE, one of the
world’s largest Life Insurance companies and Bajaj Auto, one of the biggest 2- &- 3 wheeler
manufacturers in the world.
Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in
the world, managing assets worth over a Trillion Euros (Over R. 55,00,000 crores). Allianz SE
has over 115 years of financial experience in over 70 countries.
35
Bajaj Auto is one of the most trusted name is Indian auto for over 55 years. At Bajaj Allianz
customer delight is our guiding principle. Ensuring world-class solutions by offering customized
products with transparent benefits, supported by best technology is our business philosophy.
OTHER PLAYERS:
Tata AIG Life Insurance Company Ltd
ING Vysya Life Insurance Company Private Limited
Met life India Insurance Company Pvt. Ltd.
AMP SANMAR Assurance Company Ltd.
Dabur CGU Life Insurance Company Pvt. Ltd.
CONCEPTUAL DISCUSSION
3.1 COMPANY COMPETITIVE STRATEGIES IN LAST FIVE YEARS
Five years back many new entrants were getting into market and giving competition to
Reliance, because of which company had to undergo many changes. The change that took
place have been listed below
Market trend Changing strategies in business
(Reliance)
With the enhanced competition in RELIANCE in orders cope this
36
the market due to globalization and
many new players. The focus had
started getting to customer because
now, customer was getting better or
so to say more variety in terms of
products.
competition came up new products
and also changes in the old ones..
RELIANCE LIFE INSURANCE
started its customer oriented
approach.
To sustain one market made some
changes in one market strategy as
well as making advertisement
which would show one deep
association of RELIANCE LIFE
INSURANCE with Indians and at
the same time reflect technological
changes.
Customer was getting aware with
the availability of choice to him
thus he now asked value for every
penny is spent.
RELIANCE in this course of time
launched new products well within
on reach of common man.
RELIANCE LIFE INSURANCE
makes the product to suit the
Indian pockets
RELIANCE LIFE INSURANCE
came up with easy financing
schemes. They made the tie-ups
with big financing companies such
as GE financing and country wide
financing.
RELIANCE LIFE INSURANCE
started giving the accidental
Insurance coverage for its
customers
But the best thing the RELIANCE
37
got into was buying & selling of
cars.
Technological improvements- The
competitors were convincing with
better technology which made them
cut cost and sell cheap, thus
assuring higher technology.
Changes at HDFC- RELIANCE
LIFE INSURANCE Limited could
not just sit back and see its
competitors rising and acquiring the
market share. Hence they also
improved upon technology with one
changing times. In fact they are
always on the move for new and
better technology.
For the betterment of the society
and environment they started
complying with EURO-II norms.
Another change was done in terms
of Recruitment and Selection policy
i.e. RELIANCE now started
recruiting more technical staff who
would be specialist in their fields.
Quality Assurance- There was a
need for quality order to sustain the
market share and provide better
service to the customer.
Changes incorporated by
RELIANCE- following the
customer oriented approach.
RELIANCE now focused itself by
providing after sales services.
There was increase in number of
branches and offices .
First few services required after
specific KMs was provided free.
38
Forecasting the changes in the
market five year down the line
was a tough job in term of
increasing competition.
We are gradually moving towards
the customer oriented market,
where customer very soon would
be termed as “King of the
Market”.
Customer will drive the marketing
strategy.
Market would be fragmented on
the basis of different segments for
new customers,
RELIANCE LIFE INSURANCE
would keep customer as prime
factor.
There is possibility that
RELIANCE LIFE INSURANCE
starts with the customization of
products i.e. make
Customer would like to have the
product with higher cost
effectiveness. Money being a
major consideration in current
scenario and which is expected to
raise furthermore cars need to
higher in terms of high
growth ,return and savings
RELIANCE would solve this
problem by taking following
steps:
Buying back facilities.
Easy financing and financing 0%
interest or very low rate.
More tie-ups with financial
institutional % insurance agencies
in the near futures.
Higher Technology and
innovation in terms of style, looks
and utility too would induce the
customer to buy
RELIANCE plans technology
infusion in terms of quality and
standard
Plans to use 100% Indian parts to
be used for production.
Diversification in production and
adoption of new methods for
cutting cost.
39
Company who could build the
brand in one market would sell
more.
RELIANCE- thus would adopt
both rational as well as emotional
appeal to sell their vehicle i.e.
would produce better quality of
car with assurance and also do one
advertising on the emotional
grounds to appeal the customers.
Competition – players in the
market. Not everybody would be
leader. Thus the leader would be
the one who caters the customer
need at most competitive prices
and satisfying one rule and norms
laid by the systems.
Understood the definition of the
leader and wants to be the leader
in the industry
RESEARCH METHODOLOGY
4.1 RESEARCH OBJECTIVES
The search for knowledge through objective and systematic method of finding solution to
problem is research.
The primary objective of the project is to study the changing marketing trend of reliance life
insurance
The secondary objectives of the research are as follows:
To study the securities market industry as a whole.
To know the profile of reliance life insurance.
The study deals with Reliance Life Insurance in focus and the various segments that
it caters to.
40
To study the various services and features offered by changing trend of reliance life
insurance.
The study then goes on to evaluate and analyse the findings so as to present a clear
picture of trends in the Insurance sector.
4.2 RESEARCH DESIGN
A research design is the arrangement of conditions for collections and analysis of data in a
manner that aims to combine relevance to the research problem with economies in a procedure.
I have used descriptive research design for my research.
Descriptive Research
Descriptive research includes surveys and fact findings enquiries of different kinds. It basically
gives a description of the state of affairs as it exists at present. A researcher has no control over
the variables so they can only report what has happened or what is happening. We can also use
the survey method for this purpose.
4.3 DATA SOURCES
A research design is one, which simplifies the framework of plan for the study and adds itself in
the quick collection and analysis of the data. It is a blue print that has been filled in completing
the study. Data sources are:
Primary data
The primary data are those which are collected fresh for the first time and thus happen to be
original in character. In other words, it is obtained by design to fulfill the data are original in
character and are also generated in a large number of surveys conducted mostly by government
and also by institution and research bodies.
A questionnaire was prepared for the respondents, where there views were collected.
Secondary data
41
The secondary data are those which have already been collected for some purpose other than the
problem in hand and passed through the statistical process. In other words, data that are not
originally collected rather obtained from Published and Unpublished Sources.
The secondary data has been collected through various sources:
Internet
Books
Newspaper
Magazines
Brochure
Journals
Websites
4.4 QUESTIONNAIRE DESIDN / FORMULATION
Questionnaires: - A questionnaire consists of a set of questions presented to respondent for their
answers. It can be Closed Ended of Open Ended.
Open Ended: - Allows respondents to answer in their own words & are difficult to
Interpret and Tabulate.
Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.
Types of question included:
Dichotomous questions: - Which has only two answers “Yes” or “No”.
Multiple choice questions: - Where respondent is offered more than two choices.
Importance scale: - A scale that rates the importance of some attribute.
Rating scale:- A scale that rates some attribute from “highly satisfied ” to “highly
unsatisfied “ and “very inefficient” to “very efficient
42
But in this project report, the questionnaire includes only closed type questions because it saves
respondents time and helps them to understand easily.
4.5 SAMPLE DESIGN
A sample design is a definite plan for obtaining a sample from given population. It refers to the
techniques or procedures, the researcher would adopt in selecting items for the sample.
i. Sample element /unit
The primary data was collected through survey that was systematically carried in north-east
region of Delhi. The data was collected through questionnaire. The responses of the
respondents were recorded in the questionnaire prepared for them.
ii. Extent
Extent refers to the area from the respondents belong. We have conducted the research
mainly on the people of Delhi, that too specifically, north-east region.
iii. Time frame
Time frame is the time spent on research. The time frame for our research is 8 weeks.
iv. Sampling technique
Sampling technique refers to the technique or procedure the researcher would adopt in
selecting items for the sample. We have used judgmental sampling for our research because
gathering information from every individual is not possible.
v. Sample size
Sample size refers to the number of respondents. To get a clear view we have conducted
our research on 100 people.
4.6 LIMITATIONS OF THE RESEARCH
• Since the sampling was done in Delhi only it does not represent the entire picture of
Indian market.
43
• The questionnaire might have been filled without much attention to the questions due to
lack of time by the respondents.
• Incase of Primary data, respondents were not very much interested in filling the
questionnaire and sometimes it was difficult to contact or meet the clients, because of
their work schedules and personal reasons.
• There may be biasness against some personal preferences and which would have led to
unjustified responses from the respondents.
• Personally contacting the clients involved time and cost.
• Secondary data when collected was invaluable but due to passage of time and with many
dynamic changes taking place in the markets, the information losses its value in the
current scenario.
• As gathering information from every individual was not possible so we have to take
judgmental sampling.
DATA ANALYSIS AND INTERPRETATION
Q1. Age Group?
1 Age group 25-30
2 Age group 30-35
3 Age group 35-40
4 Above age 40
S.NO TYPE OF CHOICE % AGE
1 Age group 25-30 15
2 Age group 30-35 40
3 Age group 35-40 30
44
4 Above age 40 15
INTERPRETATION:
From the above pie chart, we can understand that age group of 25 to 30 are more then other three
age groups.
Q2. Gender ?
1 Male
2 Female
S.NO TYPE OF CHOICE
1 Male 65
2 Female 35
15%
40%30%
15%
1 Age group 25-30
2 Age group 30-35
3 Age group 35-40
4 Above age 40
45
65%
35%
1 Male
2 Female
INTERPRETATION:
From the above pie chart, we can understand that males are more investing in insurance company
rather then females
Q3. Occupation?
1) Businessmen
2) Service
3) Housewife
4) Others
S.NO TYPE OF CHOICE
1 Businessmen 40
2 Service 30
3 Housewife 10
4 Others 20
46
40%
30%
10%
20%
1 Businessmen
2 Service
3 Housewife
4 Others
INTERPRETATION:
From the above pie chart, we can see businessmen, service are more then housewives and others.
Q4. Annual income?
1 50,000-1,00,000
2 1,00,000-2,50,000
3 2,50,000-3,00,000
4 Above 3,00,000
S.NO TYPE OF CHOICE
1 50,000-1,00000 15
2 1,00000-2,50000 35
3 2,50000-300000 40
4 Above 3,00000 10
47
INTERPRETATION:
From the above pie chart, it is clear 40 % ratio of the people have annual income between
2,50000-300000 as compared to the 35 % ratio of the people whose annual income falls between
1,00000-2,50000 .
Q5.Are you insured or not?
1 Yes
2 No
S.NO TYPE OF CHOICE
1 Yes 80
2 No 20
15%
35%40%
10%
1. 50,000-1,00000
2. 1,00000-2,50000
3. 2,50000-300000
4. Above 3,00000
48
80%
20%
1 Yes
2 No
INTERPRETATION:
To get the clear picture of the survey we have taken , much of who have insurance as they are
aware of various things related to insurance
6.From where you have taken insurance?
1 Public sector
2 Private sector
S.NO TYPE OF CHOICE
1 Public sector 25
2 Private sector 75
49
25%
75%
1 Public sector
2 Private sector
INTERPRETATION:
From the above pie chart, it is clear that 75 % of the people have taken insurance from private
sector and 25 % of people from public sector.
7. In your view which is the Best private sector company?
1 Reliance life insurance
2 ICICI Prudential
3 HDFC SLIC
4 Others
50
40%
25%
20%
15%
1 RELIANCE Life Insurance
2 ICICI Prudential
3 HDFC SLIC
4 Others
S.NO TYPE OF CHOICE
1 RELIANCE Life Insurance 40
2 ICICI Prudential 25
3 HDFC SLIC 20
4 Others 15
INTERPRETATION:
From the above pie chart, it is clear that about 40 % of the people prefer Reliance life insurance
as compared to the 25 % of the people which prefer ICICI prudential as their best private sector
company .
Q8. Are you satisfied with your present company?
1 Completely Satisfied
2 Partially Satisfied
3 Dissatisfied
4 Partially Dissatisfied
51
S.NO TYPE OF CHOICE % AGE
1 Completely satisfied 20
2 Partially Satisfied 40
3 Dissatisfied 25
4 Partially Dissatisfied 15
INTERPRETATION:
From the above pie chart, it is clear that about 40 % of the people are satisfied with their present
life insurance company as compared to the 25 % ratio of the people which are not satisfied.
However 15 % of the people are dissatisfied .
Q9.Which features do you think RELIANCE Life Insurance Company have
better a part from other companies?
1 Cheaper Price
2 Wide Distribution of Products
20%
40%
25%
15%1 Completely satisfied
2 partially Satisfied
3 Dissatisfied
4 partially Dissatisfied
52
3 Good Claim
4 Others
35%
15%30%
20%
1 Cheaper price
2 Wide distribution of products
3 Good claim procedure
4 Others
S.NO TYPE OF CHOICE
1 Cheaper price 35
2 Wide distribution of products 15
3 Good claim procedure 30
4 Others 20
INTERPRETATION:
From the above pie chart, it is clear 35 % of the people like the cheaper price as the unique
feature which the company should have as compared to the 30 % ratio of the people which thinks
that the claim procedure should be good and fast.
Q10. Which product do you prefer the most ?
1 ULIP Plans
2 Children Plans
3 Pension Plans
4 Endowment plans
53
20%
40%
15%
25%
1 ULIP plans
2 Children Plans
3 Pension Plans
4 Endow ment plans
S.NO TYPE OF CHOICE
1 ULIP plans 20
2 Children Plans 40
3 Pension Plans 15
4 Endowment plans 25
INTERPRETATION:
From the above pie chart, it is clear that 40 % of the people think that children plans are the best
selling product in the life insurance company as compared to the 25 % of the people which
thinks that endowment plans are best selling plans.
Q11. Which marketing strategy of the RELIANCE life Insurance attracts you
the most?
1 Advertising Strategy
2 Place Distribution Strategy
3 Making Exhibitions
4 Others
54
46%
25%
14%
15%
1 Advertising Strategy
2 Place distribution strategy
3 Making Exhibitions
4 Others
S.NO TYPE OF CHOICE
1 Advertising Strategy 46
2 Place distribution strategy 25
3 Making Exhibitions 14
4 Others 15
INTERPRETATION:
From the above pie chart, it is clear that about 46 % of the thinks that the advertising strategy of
the company attracts most of the customers as compared to the 25 % ratio of the people which
thinks that the place distribution strategy is the best strategy
Q12. Through which source of media do you come to know about
RELIANCE LIFE INSURANCE?
1. Print Media
2. Radio
3. Television
4. Campaign/Boardings
55
25%
10%
35%
30%1 Print Media
2 Radio
3 Television
4 Campaign/Boardings
S.NO TYPE OF CHOICE
1 Print Media 25
2 Radio 10
3 Television 35
4 Campaign/Boardings 30
INTERPRETATION:
From the above pie chart, it is clear that 35 % of the people came to know about RELIANCE life
Insurance though Television as compared to the 30 % ratio of the people which came to know
through campaign or boardings .
Q13. Is there any effect of not having any Brand Ambassador of Reliance
Life insurance?
1 Yes
2 No
56
S.NO TYPE OF CHOICE
1 Yes 35
2 No 65
35%
65%
1 Yes
2 No
INTERPRETATION:
From the above pie chart, it is clear that 65 % of the people think that there is no effect of not
having brand ambassador of Reliance life insurance as compared to the 35 %of the people who
think that there is no effect of not having the brand ambassador
Q14. Which is the best advertisement in your view?
1 Reliance Life Insurance
2 ICICI Prudential
3 LIC
4 Others
57
45%
15%
25%
15%
1 Reliance Life Insurance
2 ICICI Prudential
3 LIC
4 Others
S.NO TYPE OF CHOICE
1 Reliance Life Insurance 45
2 ICICI Prudential 15
3 LIC 25
4 Others 15
INTERPRETATION:
From the above pie chart, it is clear that 45% ratio of the people think that reliance life insurance
has best advertisement as compared to the 25 % ratio of the people which thinks that LIC has
best advertisement.
Q15. Which company is having good marketing strategies for their benefits?
1 Reliance life insurance
2 Bajaj Allianz life insurance
3 ICICI Prudential
4 Others
58
S.NO TYPE OF CHOICE
1 Reliance life insurance 45
2 Bajaj Allianz life insurance 25
3 ICICI Prudential 25
4 Others 05
45%
25%
25%
5%
1 Reliance life insurance
2 Bajaj Allianz life insurance
3 ICICI Prudential
4 Others
INTERPRETATION:
From the above pie chart, it is clear that 45 % ratio of the people think that reliance life insurance
has good marketing strategies for its benefit as compared to 25 % ratio of the people which think
that ICICI Prudential has good marketing strategies for their benefit.
Q16.How do you rate marketing strategies of RLIC?
1 Excellent
2 Very good
3 Good
4 Average
5 Poor
59
S.NO TYPE OF CHOICE % AGE
1 Excellent 30
2 Very good 25
3 Good 20
4 Average 15
5 Poor 10
INTERPRETATION:
From the above pie chart, it is clear 30% of the people says that marketing strategies of RLIC are
excellent as compared to the 25 % ratio of the people which says that the .marketing strategies
of RLIC are very good.
Q17. How do you rate advertisement strategies of RLIC?
1 Excellent
2 Very good
3 Good
4 Average
5 Poor
30%
25%20%
15%
10%
1 Excellent
2 Very good
3 Good
4 Average
5 Poor
60
S.NO TYPE OF CHOICE % AGE
1 Excellent 30
2 Very good 25
3 Good 20
4 Average 15
5 Poor 10
INTERPRETATION:
From the above pie chart, it is clear 30% of the people says that advertisement strategy of RLIC
are excellent as compared to the 25 % ratio of the people which says that the .advertisement
strategy of RLIC are very good.
Q18. Do you think that company has positioned its product in the
market in a better way?
1 Yes
2 No
30%
25%20%
15%
10%1 Excellent
2 Very good
3 Good
4 Average
5 Poor
61
S.NO TYPE OF CHOICE % AGE
1 Yes 61
2 No 39
INTERPRETATION:
From the above pie chart, it is clear that 61% of the people think that the company has positioned
its product in the market in a better way as compared to the 39% ratio of the people don’t thing
company has change.
FINDINGS
6.1 FINDINGS OF THE RESEARCH
39%
61%
1 Yes 2 No
62
The life insurance company has the great influence on the ULIP Plans and on the children
plans
From the study research, it is clear that most of the people like the great savings and
returns feature as the unique feature
From the study research ,it is clear that Marketing strategy of the company had the main
focus on promotion ,advertising and making exhibitions
From the study research it is clear that most of the people like marketing based on price
From the study research it is clear that most of the people want the company to change
their marketing based on publicity and promotion.
From the study research it is clear that most of the people came to know about
RELIANCE life insurance through television.
From the study research it is clear that most of the people consider RELIANCE as the
best company.
From the study research it is clear that most of the people are satisfied with their present
life insurance company.
From the study research it is clear that most of the people think that the services of the
company are normal.
From the study research it is clear that most of the people think that children plans are the
best selling products in the life insurance company.
From the study research it is clear that most of the people think that the advertising
strategy of the company attracts most of the customers.
From the study research it is clear that most of the people think that the marketing
strategy based on advertising needs the most money to be spent.
RECOMMENDATIONS
7.1 RECOMMENDATIONS FOR THE ORGANISATION
63
The company should concentrate more on sales and marketing department so that more
and more products can be sold out.
Advertisements should be the best method to advertise the products and popular among
the public
Cheaper products should be introduced by the company so that it can reach the middle
class public
Transparency should be made in between the product details and the original product sold
to the customers.
Company –customer ratio should be maintained
Proper guidance should be given to the customers so that they may reactivate there plans
and there polices
Newly launched plans should be told to their customers so that they may think for
activating that plans in future
The advisor should have the proper knowledge of the product which he/she is shelling to
their customers
ANNEXURE
QUESTIONNAIRE
Q1. Age Group?
1 Age group 25-30 ( )
64
2 Age group 30-35 ( )
3 Age group 35-40 ( )
4 Above age 40 ( )
Q2. Gender ?
1 Male ( )
2 Female ( )
Q3. Occupation?
1. Businessmen ( )
2. Service
( )
3. Housewife ( )
4. Others ( )
Q4. Annual income?
1. 50,000-1,00,000 ( )
2. 1,00,000-2,50,000 ( )
3. 2,50,000-3,00,000 ( )
4. Above 3,00,000 ( )
Q5.Are you insured or not?
1 Yes ( )
2 No ( )
65
6.From where you have taken insurance?
1 Public sector ( )
2 Private sector ( )
7. In your view which is the Best private sector company?
1. Reliance life insurance ( )
2. ICICI Prudential ( )
3. HDFC SLIC ( )
4. Others ( )
Q8. Are you satisfied with your present company?
1. Completely Satisfied ( )
2. Partially Satisfied ( )
3. Dissatisfied ( )
4. Partially Dissatisfied ( )
Q9.Which features do you think RELIANCE Life Insurance Company have
better a part from other companies?
1 Cheaper Price ( )
2 Wide Distribution of Products ( )
3 Good Claim ( )
4 Others ( )
Q10. Which product do you prefer the most ?
1 ULIP Plans ( )
2 Children Plans ( )
3 Pension Plans ( )
66
4 Endowment plans ( )
Q11. Which marketing strategy of the RELIANCE life Insurance attracts you
the most?
1. Advertising Strategy ( )
2. Place Distribution Strategy ( )
3. Making Exhibitions ( )
4. Others ( )
Q12. Through which source of media do you come to know about
RELIANCE LIFE INSURANCE?
1. Print Media ( )
2. Radio ( )
3. Television ( )
4. Campaign/Boardings ( )
Q13. Is there any effect of not having any Brand Ambassador of Reliance
Life insurance?
1 Yes ( )
2 No ( )
.
Q14. Which is the best advertisement in your view?
1 Reliance Life Insurance ( )
67
2 ICICI Prudential ( )
3 LIC ( )
4 Others ( )
Q15. Which company is having good marketing strategies for their benefits?
1 Reliance life insurance ( )
2 Bajaj Allianz life insurance ( )
3 ICICI Prudential ( )
4 Others ( )
Q16.How do you rate marketing strategies of RLIC?
1 Excellent ( )
2 Very good ( )
3 Good ( )
4 Average ( )
5 Poor ( )
Q17. How do you rate advertisement strategies of RLIC?
1 Excellent ( )
2 Very good ( )
3 Good ( )
4 Average ( )
5 Poor ( )
Q18. Do you think that company has positioned its product in the
