Gaurav Project[1]

7/31/2019 Gaurav Project[1]

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Acknowledgement

I here by take this opportunity to thank the people who have helped me during

the project work of two month. I specially want to thank my external guide Mr.

Ravi Gaikwad who was very cooperative with me during the entire project work.

He helped me to acquire the material regarding the mutual funds, insurance and

other financial instruments and information about companies. He also helped me in

getting contacts of different officers from the respective mutual fund companies

and insurance company. I also expressed my gratitude towards Mr. Ninad and Mr.

Kuldeep who helped me in various matters . due to their kindness I was able to

get second hand data easily.

I am also thankful to my internal guide Prof. Chetan Wakalkar. Sir

guided me throughout the project. Sirs exellent guidance , encouragement and

patience made possible successful completion of project. I was lucky to get his

guidance.

Last but not the least I am also thankful to the whole staff of karvy

securities ltd(pune main branch) who directly or indirectly helped me throughout

the project tenure.

GAURAV KABRA

Summer trainee

Indira school of management studies 1
http://www.karvy.com/bottom.asp


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EXECUTIVE SUMMARY



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Findings

It is apparent from the table 1 and a graph that maximum respondent are in

between the age of 21- 35 years. From that we can make that the respondent

between this ages are more aware about the various insurance policies and

benefits of the same

We can also conclude from table 2 that most of the respondents are professionals

and that too are IT professionals. So we can make that more of professionals are

getting insured and the reason behind is that they are aware of benefits of various

insurance policies.

It is apparent from the table 6 and graph that most of the respondents buying

decisions affect from Tax benefits. There are few respondents who buy insurance

for return and risk coverage.

It is apparent from the table 7 and a graph that most of the respondents due to

assure long term return preferred to buy endowment policies. People preferred

investing in Mutual Fund instead of paying single premium in Mutual Fund plan.

It is apparent from the table 8 and a graph that most of the respondents ranked

insurance policies excellent as per as risk is concerned at the same time they give

equal weight age to Tax planning also and overall they ranked insurance policies

as good insurance policies as good investment instrument.

Most of the people take decision of their own while buying insurance policies

where as 24% of respondents take advice of tax consultants regarding taxation.



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Limitations

1) Small size of sample - because of time consideration the sample size taken small,

which effects on the accuracy/ reliability of the research.

2) Peoples perception - some of the people misunderstood the researcher

as an insurance agent so they refuse to respond on the background of

already getting insured.

3) Limited time span - some of the respondent gave the appointments beyond the

research period therefore such people are excluded.

4) Lack interest in response - some of the people gave little time and shows lack

interest for filling the questionnaire.

5) False data - people provide false data as they were scared about providing actual

data such as net income , premium paid etc.

6) Appointments - getting appointments with people was difficult as most of the

people were busy and it was difficult to contact them again and again



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RECOMMENDATION

Recommendation on the basis of 4 ps

PRODUCT i.e Various insurance policies .

New product innovation should be always there. Company should design more

attractive policies / product compares to LIC and other private players company should

consider and should try more to concentrate to the customer whose annual income is lessthan 1 lakh while designing the product.

PRICING STRATEGY

As far as this part is concern I can say that company can attract the customers

by designing lower premium, maximum benefits and by less exclusions in benefits

compares to other players.

PROMOTION STRATEGIES

As far as pune city is concern companies can promote their various insurance

products by using attractive hoardings at proper places, company can promote the

products by using various sales promotion activities like quiz, coupons with products etc

PHYSICAL DISTRIBUTION

The success in the marketing of products welcome to those insurers that become



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more creative in capturing a wider range of customers by using multiple distribution

channels. It comes by proper recruitment, training and motivation to financial consultants

and develop managers.

POSITIONING

Companies can make better positioning of various life insurance products

different specially compares to LIC in area like less exclusions in every product

maximum benefits, lower premium, new product innovation, better services, awareness

for customers toward product suitability is crucial to increase in market share.



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INDUSTRY PROFILE



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INTRODUCTION

What is insurance?

All assets have economic value. The asset would have been created through the efforts of

the owner, in the expectation that, either through the income generated therefrom or some

other output, some of his needs would be met. In the case of a motor car, it provides

comfort & convenience in transportation. There is no direct income. There is a normally

expected life time for the asset during which time it is expected to perform. The owner,

aware of this, can so manage his affairs that by the end of that life time, a substitute is made

available to ensure that the value or income is not lost.

However, if the asset gets lost earlier, being destroyed or made non-functional, through an

accident or other unfortunate event, the owner & those deriving benefits therefrom suffer.

Hence Insurance is a tool which helps to reduce effects of such adverse events.

A human life is also an income-generating asset. This asset also can be lost through

unexpectedly early death or made non-functional through sickness & disabilities caused by

accidents. Accidents may or may not happen. Death will happen, but the timing is uncertain.



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If it happens around the time of one's retirement, when it could be expected that the income

will cease, the person concerned could have made some other arrangements to meet the

continuing needs. But if it happens much earlier when the alternate arrangements are not in

place, insurance is necessary to help the dependents.

In case of a human being, he may have made arrangements for his needs after his

retirement. These would have been made on the basis of some expectations like he may live

for another 15 years, or that his children will look after him. If any of these expectations do

not come true, the original arrangement would become inadequate and there could be

difficulties.

Living too long can be as much a problem as dying too young. These are risks, which need

to be safeguarded against. Insurance takes care of it.

DEFINATION



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promise of reimbursement in the case of loss; paid to people or companies so

concerned about hazards that they have made prepayments to an insurance

company

policy: written contract or certificate of insurance; "you should have read the small

print on your policy"

indemnity: protection against future loss

Insurance is a system to alleviate financial losses by transferring risk of loss from

one entity to another

A contract in which one party agrees to pay for another party's financial loss

resulting from a specified event (for example, a collision, theft, or storm damage).

Lease agreements generally require that you maintain vehicle collision and

comprehensive insurance as well as liability insurance for bodily injury and

property damage.

Plan in which individuals and organization who are concerned about potential riskswill pay premiums to an insurance company, who in return, will reimburse them if

there is loss. To generate a profit, the insurer will invest the premiums it receives.

Examples of the different types of insurance available are automobile, home, health

and worker's compensation. Whereas in most cases the insured is paid for their loss,

with life insurance a beneficiary is paid when the insured person passes away

History of Insurance

The origin and practice of insurance is as ancient as human civilization.



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From Cave age till date, the story of evolution of mankind is in fact a saga of continuous

search for security. His problems have been the same, though the form has changed with the

social & economic circumstances.

When man used to live in the caves, he used to search for security against animals because

they could kill him while he was asleep. He was not at all sure if he could hunt every day &

get his food.

Because of the above insecurity he used to live in groups so that the other members of the

tribe could come to help him in time of crisis.

Later on, insurance was practiced in a different form. Small contributions of food grains

were collected from farmers, hoarded in the local temple premises to be released when there

was a famine or other calamity.

Today, insurance works on the same principle. But, with growing financial implications the

process started demanding money rather than community contribution.

The modern concept of insurance came to India with the arrival of Europeans. The first

life Insurance company was established in India in 1818 as Oriental life insurance company

by Europeans for the welfare of widows of Europeans.

It was strange that many of the Companies floated thereafter were looking after European

interest and even charged extra premium on Indian lives. Bombay mutual life Assurance

society Ltd. established in 1870 was the first to stop this discrimination . This was the year

in which the first Insurance act was passed by the British parliament. The insurance

business flourished thereafter.



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By the year 1955 there were 245 insurance companies and provident societies, out of which

16 were non Indian companies.

A comprehensive legislation "The Insurance act 1938" was passed with a view to

consolidate and amend the laws relating to the business of insurance. It came into force

with effect from July '01, 1939.The act was modified in 1950 .

The broader objectives of socialism prompted the government to nationalize the insurance

business, in the year 1956. The general insurance business was nationalized in 1972,

through GIC Act 1972. The Life Insurance corporation of India came into existence on 1 st

September 1956.

Why one needs Insurance?

Let us take an example. Mr.Sharma has four members in his family. Himself, his wife &

two children. Family is totally dependent on the income of Mr. Sharma. In other

words Mr.Sharma is an income generating asset of the family. He expects to earn during

his lifetime sufficiently so as to provide for his old age.

But if he dies at a young age, the family remains unprovided for. To take care of this

economic loss he should go for an insurance cover.,



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In other words, death of any of the earning members, their physical disability and similar

events which are fortuitous in nature are out of the control of the family. If they are

destined to happen we can not stop them. All these events subject the members of family

to financial loss, erosion of income, financial difficulties and hence to lot of sufferings.

Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril

cannot be avoided through insurance. The peril can sometimes be avoided, through better

safety & damage control management. Insurance only tries to reduce the impact of the risk

on the owner of the asset & those who depend on that asset. It compensates the losses (may

not be fully). Only economic or financial losses can be compensated.

Life is full of uncertainties. We all know that death is certain but the timing is uncertain.

This uncertainty of time has led to the invention of insurance

We all make efforts towards earning a living and then working hard for its betterment.

Insurance is necessary to ensure that the basic necessities of life, comfort and pleasure

derived by all of us from our living continues to be available for us.

People buy insurance because they realize the need of protection for their families after

their death or of a reserve for emergencies and of additional income for later years.

Hence we can say " Life insurance is indeed a necessity of life".



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Life insurance protects against loss of income of an individual. Life insurance does not

protect the asset. It also does not prevent its loss.

The concept of insurance has been extended beyond the coverage of tangible assets.

Exporters run the risk of the importers in the other country defaulting as well as losses due

to sudden change in currency exchange rates, economic policies or political disturbances.

These risks are now insured.

Doctors run the risk of being charged with negligence and subsequent liability for

damages. The amounts in question can be fairly large, beyond the capacity of individuals to

bear. These are insured. Thus, insurance is extended to intangibles. In some countries,

the voice of a singer or the legs of a dancer may be insured.

Need of Insurance .

To provide cash to meet various routine expenses of the family on

or immediately after the death of the income earner of the family.

To prevent the familys accustomed standard of living even after the death of the

breadwinner.

To provide continuous flow of funds for the living spouse.

To allocate income funds for the childrens education.

To provide a retirement income throughout old age.



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To provide a reliable savings plan for the future.

To supplement income when earning power is reduced or eroded by illness, accident

or any handicap.

To furnish surplus earnings for the investors should disaster strike.

INDUSTRY PROFILE

Origin Of Life Insurance

Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of

the caravan trade by giving loans that had to be later repaid with interest when the

goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the



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practice

That, perhaps, was how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens formed burial clubs

that would meet the funeral expenses of its members as well as help survivors by

making some payments.

As European civilization progressed, its social institutions and welfare practices also got

more and more refined. With the discovery of new lands, sea routes and the consequent

growth in trade, Medieval guilds took it upon themselves to protect their member traders

from loss on account of fire, shipwrecks and the like.

Since most of the trade took place by sea, there was also the fear of pirates. So these guilds

even offered ransom for members held captive by pirates. Burial expenses and support in

times of sickness and poverty were other services offered. Essentially, all these revolvedaround the concept of insurance or risk coverage. That's how old these concepts are, really.



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In 1347, in Genoa, European maritime nations entered into the earliest known insurance

contract and decided to accept marine insurance as a practice.

The first step...

Insurance as we know it today owes its existence to 17th century England. In fact, it began

taking shape in 1688 at a rather interesting place called Lloyd's Coffee House in London,

where merchants, ship-owners and underwriters met to discuss and transact business. By

the end of the 18th century, Lloyd's had brewed enough business to become one of the first

modern insurance companies.

Enter companies...

The first stock companies to get into the business of insurance were chartered in England in

1720. The year 1735 saw the birth of the first insurance company in the American colonies

in Charleston, SC.

In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance

corporation in America for the benefit of ministers and their dependents.



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However, it was after 1840 that life insurance really took off in a big way. The trigger:

reducing opposition from religious groups

The growing years...

The 19th century saw huge developments in the field of insurance, with newer products

being devised to meet the growing needs of urbanization and industrialization.

In 1835, the infamous New York fire drew people's attention to the need to provide for

sudden and large losses. Two years later, Massachusetts became the first state to require

companies by law to maintain such reserves. The great Chicago fire of 1871 further

emphasized how fires can cause huge losses in densely populated modern cities. The

practice of reinsurance, wherein the risks are spread among several companies, was devised

specifically for such situations.

There were more offshoots of the process of industrialization. In 1897, the British

government passed the Workmen's Compensation Act, which made it mandatory for a

company to insure its employees against industrial accidents.

With the advent of the automobile, public liability insurance, which first made itsappearance in the 1880s, gained importance and acceptance.



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In the 19th century , many societies were founded to insure the life and health of their

members, while fraternal orders provided low-cost, members-only insurance.

Even today, such fraternal orders continue to provide insurance coverage to members as do

most labour organizations. Many employers sponsor group insurance policies for their

employees, providing not just life insurance, but sickness and accident benefits and old-age

pensions. Employees contribute a certain percentage of the premium for these policies.

In India...

Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of

Life Insurance Corporation of India's corporate headquarters, is derived from the Rig

Veda. The term suggests that a form of "community insurance" was prevalent around 1000BC and practised by the Aryans.

Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in

1870. Other companies like Oriental, Bharat and Empire of India were also set up in the

1870-90s.



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It was during the swadeshi movement in the early 20th century that insurance witnessed a

big boom in India with several more companies being set up.

As these companies grew, the government began to exercise control on them. The

Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of

1938 that looked into investments, expenditure and management of these companies' funds.

By the mid-1950s, there were around 170 insurance companies and 80 provident fund

societies in the country's life insurance scene. However, in the absence of regulatory

systems, scams and irregularities were almost a way of life at most of these companies.

As a result, the government decided to nationalize the LIFE INSURANCE business in

India. THE LIFE INSURANCE CORPORATION OF INDIA was set up in 1956 to take

over around 250 life companies.

For years thereafter, insurance remained a monopoly of the public sector. It was only after

seven years of deliberation and debate - after the RN Malhotra Committee report of 1994

became the first serious document calling for the re-opening up of the insurance sector to

private players -- that the sector was finally opened up to private players in 2001.



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The INSURANCE REGULATORY & DEVELOPMENT AUTHORITY , an

autonomous insurance regulator set up in 2000, has extensive powers to oversee the

insurance business and regulate in a manner that will safeguard the interests of the insured

Role of Life Insurance

Risks and uncertainties are part of lifes great adventure accident, illness, theft,

natural disaster theyre all built into the working of the Universe, waiting to happen.



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Role 1: Life insurance as Investment

Insurance is an attractive option for investment. While most people recognize the risk

hedging and tax saving potential of insurance, many are not aware of its advantages

as an investment option as well. Insurance products yield more compared to regular

investment options, and this is besides the added incentives offered by insurers.

You cannot compare an insurance product with other investment schemes for the simple

reason that it offers financial protection from risks, something that is missing in non-

insurance products.

In fact, the premium you pay for an insurance policy is an investment against risk. Thus,

before comparing with other schemes, you must accept that a part of the total amount

invested in life insurance goes towards providing for the risk cover, while the rest is used

for savings.



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In life insurance, unlike non-life products, you get maturity benefits on survival at the end

of the term. In other words, if you take a life insurance policy for 20 years and survive the

term, the amount invested as premium in the policy will come back to you with added

returns. In the unfortunate event of death within the tenure of the policy, the family of the

deceased will receive the sum assured.

INSURANCE is a unique investment avenue that delivers sound returns in addition to

protection.

Role 2: Life insurance as Risk cover

First and foremost, insurance is about risk cover and protection financial protection, to be

more precise to help outlast lifes unpredictable losses. Designed to safeguard against

losses suffered on account of any unforeseen event, insurance provides you with that

unique sense of security that no other form of investment provides. By buying life

insurance, you buy peace of mind and are prepared to face any financial demand that would

hit the family in case of an untimely demise.

To provide such protection, insurance firms collect contributions from many people who

face the same risk. A loss claim is paid out of the total premium collected by the

insurance companies, who act as trustees to the monies.

Insurance also provides a safeguard in the case of accidents or a drop in income after



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retirement. An accident or disability can be devastating, and an insurance policy can lend

timely support to the family in such times. It also comes as a great help when you retire,

in case no untoward incident happens during the term of the policy.

With the entry of private sector players in insurance, you have a wide range of products

and services to choose from. Further, many of these can be further customized to fit

individual/group specific needs.

Role 3: Life insurance as Tax planning

Insurance serves as an excellent tax saving mechanism too. The Government of India has

offered tax incentives to life insurance products in order to facilitate the flow of funds into

productive assets. Under Section 88 of Income Tax Act 1961, an individual is entitled to a

rebate of 20 per cent on the annual premium payable on his/her life and life of his/her

children or adult children. The rebate is deductible from tax payable by the individual or a

Hindu Undivided Family. This rebate is can be availed upto a maximum of Rs 12,000 on

payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year, you can buy

anything upwards of Rs 10 lakh in sum assured. (depending upon the age of the insured

and term of the policy) This means that you get a Rs 12,000 tax benefit. The rebate is

deductible from the tax payable by an individual or a Hindu Undivided Family.



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Types Of Life Insurance

Most of the products offered by Indian life insurers are developed and structured around

these "basic" policies and are usually an extension or a combination of these policies. So,

what are these policies and how do they differ from each other?



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TERM INSURANCE POLICY

A term insurance policy is a pure risk cover for a specified period of time. What

this means is that the sum assured is payable only if the policyholder dies within the

policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family

is entitled to the money if he dies within that 15-year period.

What if he survives the 15-year period? Well, then he is not entitled to any

payment; the insurance company keeps the entire premium paid during the 15-year

period. So, there is no element of savings or investment in such a policy. It is a 100 per cent

risk cover. It simply means that a person pays a certain premium to protect his

family against his sudden death. He forfeits the amount if he outlives the period of

the policy. This explains why the Term Insurance Policy comes at the lowest cost.



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WHOLE LIFE POLICY

As the name suggests, a Whole Life Policy is an insurance cover against death,

irrespective of when it happens.

Under this plan, the policyholder pays regular premiums until his death, following

which the money is handed over to his family.

This policy, however, fails to address the additional needs of the insured during his post-

retirement years. It doesn't take into account a person's increasing needs either. While the

insured buys the policy at a young age, his requirements increase over time. By the time he

dies, the value of the sum assured is too low to meet his family's needs. As a result of these

drawbacks, insurance firms now offer either a modified Whole Life Policy or combine in

with another type of policy.

ENDOWMENT POLICY

Combining risk cover with financial savings, an endowment policy is the most popular policies in the world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives

the policy term.

If the insured dies during the tenure of the policy, the insurance firm has to pay the

sum assured just as any other pure risk cover.

A pure endowment policy is also a form of financial saving, whereby if the person

covered remains alive beyond the tenure of the policy, he gets back the sum assured

with some other investment benefits.



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In addition to the basic policy, insurers offer various benefits such as double endowment

and marriage/ education endowment plans. The cost of such a policy is slightly higher but

worth its value.

MONEY BACK POLICY

These policies are structured to provide sums required as anticipated expenses

(marriage, education, etc) over a stipulated period of time. With inflation becoming

a big issue, companies have realized that sometimes the money value of the policy

is eroded. That is why with-profit policies are also being introduced to offset some

of the losses incurred on account of inflation.

A portion of the sum assured is payable at regular intervals. On survival the

remainder of the sum assured is payable.

In case of death, the full sum assured is payable to the insured.

The premium is payable for a particular period of time.



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statistical information about both life and non-life insurance businesses.

1938 : Earlier legislation consolidated and amended to by the Insurance Act with the

objective of protecting the interests of the insuring public.

1956 : 245 Indian and foreign insurers and provident societies taken over by the central

government and nationalised. LIC formed by an Act of Parliament, viz. LIC Act,

1956 , with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, can trace its roots to the

Triton Insurance Company Ltd., the first general insurance company established in the

year 1850 in Calcutta by the British.Some of the important milestones in the general insurance business in India are:

1907 : The Indian Mercantile Insurance Ltd. set up, the first company to transact all

classes of general insurance business.

1957 : General Insurance Council, a wing of the Insurance Association of India, frames a

code of conduct for ensuring fair conduct and sound business practices.

1968 : The Insurance Act amended to regulate investments and set minimum solvency

margins and the Tariff Advisory Committee set up.

1972 : The General Insurance Business (Nationalisation) Act, 1972 nationalised the

general insurance business in India with effect from 1st January 1973 .

107 insurers amalgamated and grouped into four companies viz. the National

Insurance Company Ltd., the New India Assurance Company Ltd., the

Oriental Insurance Company Ltd. and the United India Insurance Company

Ltd. GIC incorporated as a company.

Insurance sector reforms



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In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.

N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its

future direction.

The Malhotra committee was set up with the objective of complementing the reforms

initiated in the financial sector.

The reforms were aimed at creating a more efficient and competitive financial system

suitable for the requirements of the economy keeping in mind the structural changes

currently underway and recognising that insurance is an important part of the overall

financial system where it was necessary to address the need for similar reformsIn 1994, the committee submitted the report and some of the key recommendations

included:

i) Structure

Government stake in the insurance Companies to be brought down to 50%

Government should take over the holdings of GIC and its subsidiaries so that these

subsidiaries can act as independent corporations

All the insurance companies should be given greater freedom to operate

ii) Competition

Private Companies with a minimum paid up capital of Rs.1bn should be allowed

to enter the industry

No Company should deal in both Life and General Insurance through a single

entity

Foreign companies may be allowed to enter the industry in collaboration with the

domestic companies



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Postal Life Insurance should be allowed to operate in the rural market

Only one State Level Life Insurance Company should be allowed to operate in

each state

iii) Regulatory Body

The Insurance Act should be changed

An Insurance Regulatory body should be set up

Controller of Insurance (Currently a part from the Finance Ministry) should be

made independent

iv) Investments

Mandatory Investments of LIC Life Fund in government securities to be reduced

from 75% to 50%

GIC and its subsidiaries are not to hold more than 5% in any company (There

current holdings to be brought down to this level over a period of time)

v) Customer Service

LIC should pay interest on delays in payments beyond 30 days

Insurance companies must be encouraged to set up unit linked pension plans

Computerization of operations and updating of technology to be carried out in the

insurance industry

The committee emphasized that in order to improve the customer services and increase

the coverage of the insurance industry should be opened up to competition. But at the

same time, the committee felt the need to exercise caution as any failure on the part of

new players could ruin the public confidence in the industry.

Hence, it was decided to allow competition in a limited way by stipulating the minimum



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capital requirement of Rs.100 crores. The committee felt the need to provide greater

autonomy to insurance companies in order to improve their performance and enable them

to act as independent companies with economic motives. For this purpose, it had

proposed setting up an independent regulatory body.

The Insurance Regulatory and Development Authority

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in

Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering

the private sector insurance companies.

The other decisions taken simultaneously to provide the supporting systems to the

insurance sector and in particular the life insurance companies was the launch of the

IRDAs online service for issue and renewal of licenses to agents.

The approval of institutions for imparting training to agents has also ensured that the

insurance companies would have a trained workforce of insurance agents in place to sell

their products, which are expected to be introduced by early next year.



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Since being set up as an independent statutory body the IRDA has put in a framework of

globally compatible regulations. In the private sector 12 life insurance and 6 general

insurance companies have been registered.

Insurance Sector

4.47 Reforms in the insurance sector commenced with the enactment of the Insurance

Regulatory and Development Authority Act 1999, which facilitated the entry of private

insurance companies into the Indian insurance market. The Insurance Regulatory and

Development Authority (IRDA) was set up on April 19, 2000 to protect the interest of the

holders of insurance policies, and to regulate, promote and ensure orderly growth of the

insurance industry. Ten life insurance companies and six general insurance companies have

been granted certificate of registration, out of which 12 companies have commenced

business. The capital base of private insurance companies and its comparison with that of

General Insurance Corporation of India (GIC) and its subsidiaries as on March 31, 2001



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The InsurancePlayers

Licenseshave beenissued for thefollowingcompanies

Kotak Mahindra Old

Mutual Life Insurance Limited

ICICI Prudential Life Insurance Company Limited

Indira school of management studies

Capital Base of Insurance Companies(Paid up Capital and Free Reserves)

(Rs. Crore)GIC 2,662.04National 1,052.93New India 3,066.28Oriental 918.86United India 1,177.63Private Companies* 1,862.50

* Only paid up capital

36


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HDFC Standard Life Insurance Company Limited

Birla Sun Life Insurance Company Limited

TATA AIG Life Insurance Company Limited

Max New York Life Insurance Company Limited

SBI Cardiff Life Insurance Company Limited

ING Vysya Life Insurance Company Limited

Bajaj Allianz Life Insurance Company Limited

MetLife Life Insurance Company Limited

Aviva Life Insurance Company Limited

AMP Sanmar Life Insurance Company Limited



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investors in various capacities, and provides investor services to over 300 corporates,

comprising the who is who of Corporate India. KARVY covers the entire spectrum of

financial services such as Stock broking, Depository Participants, Distribution of

financial products - mutual funds, bonds, fixed deposit, equities, Insurance Broking,

Commodities Broking, Personal Finance Advisory Services, Merchant Banking &

Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional

management team and ranks among the best in technology, operations and research of

various industrial segments.

KARVY the beginnings.

The birth of Karvy was on a modest scale in 1981. It began with the vision and enterprise

of a small group of practicing Chartered Accountants who founded the flagship company

Karvy Consultants Limited. We started with consulting and financial accounting

automation, and carved inroads into the field of registry and share accounting by 1985.

Since then, we have utilized our experience and superlative expertise to go from strength

to strengthto better our services, to provide new ones, to innovate, diversify and in the

process, evolved Karvy as one of Indias premier integrated financial service enterprise.

Thus over the last 20 years Karvy has traveled the success route, towards building a

reputation as an integrated financial services provider, offering a wide spectrum of

services. And we have made this journey by taking the route of quality service, path

breaking innovations in service, versatility in service and finallytotality in service.

Our highly qualified manpower, cutting-edge technology, comprehensive infrastructure



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and total customer-focus has secured for us the position of an emerging financial services

giant enjoying the confidence and support of an enviable clientele across diverse fields in

the financial world.

Our values and vision of attaining total competence in our servicing has served as the

building block for creating a great financial enterprise, which stands solid on our

fortresses of financial strength - our various companies.

With the experience of years of holistic financial servicing behind us and years of

complete expertise in the industry to look forward to, we have now emerged as a premier

integrated financial services provider.

And today, we can look with pride at the fruits of our mastery and experience

comprehensive financial services that are competently segregated to service and manage

a diverse range of customer requirements.

Insurance

At Karvy Insurance Broking Pvt. Ltd ., we provide both life and non-life insurance

products to retail individuals, high net-worth clients and corporate. With the opening up

of the insurance sector and with a large number of private players in the business, we are

in a position to provide tailor made policies for different segments of customers. In our

journey to emerge as a personal finance advisor, we will be better positioned to leverage

our relationships with the product providers and place the requirements of our customers



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appropriately with the product providers. With Indian markets seeing a sea change, both

in terms of investment pattern and attitude of investors, insurance is no more seen as only

a tax saving product but also as an investment product. By setting up a separate entity, we

would be positioned to provide the best of the products available in this business to our

customers.

Our wide national network, spanning the length and breadth of India, further supports

these advantages. Further, personalized service is provided here by a dedicated team

committed in giving hassle-free service to the clients.

Karvy consultants ltd

As the flagship company of the Karvy Group, Karvy Consultants Limited has always

remained at the helm of organizational affairs, pioneering business policies, work ethic

and channels of progress.

Having emerged as a leader in the registry business, the first of the businesses that we

ventured into, we have now transferred this business into a joint venture with

Computershare Limited of Australia, the worlds largest registrar. With the advent of

depositories in the Indian capital market and the relationships that we have created in the

registry business, we believe that we were best positioned to venture into this activity as a

Depository Participant. We were one of the early entrants registered as Depository



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Participant with NSDL (National Securities Depository Limited), the first Depository in

the country and then with CDSL (Central Depository Services Limited). Today, we

service over 6 lakhs customer accounts in this business spread across over 250

cities/towns in India and are ranked amongst the largest Depository Participants in the

country. With a growing secondary market presence, we have transferred this business to

Karvy Stock Broking Limited (KSBL), our associate and a member of NSE, BSE and

HSE.

IT enabled services

Our Technology Services division forms the ideal platform to unleash our technology

initiatives and make our presence felt on the Internet. Our past achievements include

many quality websites designed, developed and deployed by us. We also possess our own

web hosting facilities with dedicated bandwidth and a state-of-the-art server farm (data

center) with services functioning on a variety of operating platforms such as Windows,

Solaris, Linux and Unix.

The corporate website of the company, www.karvy.com , gives access to in-depth

information on financial matters including Mutual Funds, IPOs, Fixed Income Schemes,

Insurance, Stock Market and much more. A link called Resource Center, devoted solely

to research conducted by our team of experts on various financial aspects like Sector

Research, deals exclusively with in-depth analysis of the key sectors of the Indian

economy. Besides, a host of other links like My Portfolio which acts as a personalized



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and customized financial measure, makes this site extremely informative about

investment options, market trends, news as also about our company and each of the

services offered here.

ACHIEVEMENTS

Among the top 5 stock brokers in India (5% of NSE volumes)

India's No. 1 Registrar & Securities Transfer Agents

Among the top 3 Depository Participants

Largest Network of Branches & Business Associates

ISO 9002 certified operations by DNV

Among top 10 Investment bankers

Largest Distributor of Financial Products



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Adjudged as one of the top 50 IT uses in India by MIS Asia

Full Fledged IT driven operations

Quality policy

To achieve and retain leadership, Karvy shall aim for complete customer satisfaction, by

combining its human and technological resources, to provide superior quality financial

services. In the process, Karvy will strive to exceed Customer's expectations.

Quality Objectives

As per the Quality Policy, Karvy will :

Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of services.

Establish a partner relationship with its investor service agents and vendors that

will help in keeping up its commitments to the customers.

Provide high quality of work life for all its employees and equip them with

adequate knowledge & skills so as to respond to customer's needs.

Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

Use state-of-the art information technology in developing new and innovative



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OBJECTIVES



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Objective

To understand the investment need of customer.

To find out the awareness of insurance in Pune.

The survey aimed at bringing about awareness in the public about the various

services provided by the Karvy consultancy and suggesting services according to

their needs and requirement.

To know the potential of insurance industry.



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METHODOLOGY



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Research methodology

What is research methodology?

Research methodology comprises defining and redefining the problem , formulating

hypothesis or suggesting solution , collecting , organizing and evaluating the data ,

making deduction and reaching to conclusions and determine whether the formulated

hypothesis is right or wrong.

Data source:

Information can be gathered through primary and secondary sources. Secondary data

are data were collected for another purpose and already exist somewhere. Primary

data are gathered for a specific research project .

Primary sources

Primary sources are those where researcher get insight of its consumer by the way of

which can be done by-

1) questionnaire

2) interview

3) group discussion

primary research in the project constitute of 70% weight age. Sample size of respondents

in 100 who are from the service or business background.

Also the views of different marketing executives of different insurance companies also



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helped to analyze understanding of investor community.

According to this results obtained from the primary research and secondary research is

done and which is the main part of this study with this secondary research an data is

for analyzing the people perception towards various investment instruments.

Secondary data

To understand insurance concepts researcher has referred study materials of insurance

institute of India. The economic times websites like ICICIpulife.com, bimonline.com,

karvy.com etc to know the various product features and benefits researcher has referred

foundation product module. Before starting the field work researcher had done the

insurance providers in pune and all over India. Then researcher has compared the

different company like LIC, birla sunlife, Tata AIG, aviva life insurance and many more

with respect to their product features, benefits, premiums and services they offered. This

information was available through product leaf lets of different companies, their officials,

company website and through different search engines.

The information such as name, address, telephone number etc of persons to be

contacted was provided by the companies own database of the high net worth individuals.

The pune telecom directory was also referred for changed telephone number of the

persons to be contacted.

Research approach

The most suitable approach in this reason was the survey. The survey method is

the data collection is suited for descriptive research. Survey usually includes research



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instrument, sampling plans and contact methods.

Research instruments:

Marketing research has a choice of two main research instruments in collecting primary

data: Questionnaire and mechanical devices. A questionnaire consists of a set of questions

presented to the respondent for their answers. Because of its flexibility, the questionnaire is

by far the most common instrument used to collect primary data. The questionnaire has its

own inherent advantages. The major benefits of the questionnaire include the following:

1. The questionnaire contained the question that touched upon every aspect of the

study and are rendered in the status of being complete in proving full information

needed for the study.

2. Multiple option questions made the interview easier as all the options were in

front of user.

3. The presentation of the question in the questionnaire, in the tabular form, helped

to get the maximum information in fully systematic manner, through minimum

number of question. This also gave it an attractive and presentable look.

4. The question was straight forward in easy language and clear meaning. No

question was ambiguous to confuse the subject.



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5. Due to the general nature of the topic, questionnaire could be administered with

the customer with equal ease and labor.

Sampling plan:

After deciding on the research approach and instruments, the marketing research must

design a sampling plan. This plan calls following decisions.

1) sampling unit (who is to be surveyed)

It gives the target population that will be sampled. The target population of this

research was mainly H.N.I which includes executives, IT professionals and

businessmen.

2) universe

The universe of the research was potential investors of pune city.

3) Frame

The sample frame was potential people below the age of 55 years.

4)sample size

large samples give reliable results then small samples but it is not feasible to

survey the entire target population or even a substantial portion to achieve reliable

results. This projects maintained a sample size of 100 people. The sample size was

decided on the basis on available time, resources and the budget of the research.

SAMPLE METHOD

Non probability convenience sampling method was used for selecting the

respondents. Since universe i.e pune city is very vast the researcher selected the

respondents that were most accessible population members.



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Contact method

Once the sampling plan has been determined the marketing researcher must decide

how the subject should be contacted i.e mail, telephone, personal or online interviews.

In this project considering the sample size, objective and time available the

researcher used personal and telephone interviews.

Firstly, the researcher made cold calls to the samples and introduced about Karvy.

The researcher explained about purpose of his calling and seek for appointment with

the contacted person. The appointment schedule was maintained and followed by the

researcher.

Secondly, on the appointment date and time the personal interview was done and

the necessary primarily information was collected with help of questionnaire.



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ANALYSIS



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DATA ANALYSIS AND FINDINGS

Demographic analysis

1) Age wise analysis

0

5

10

15

20

25

30

35

40

No. of respondents

Below 20 years21-35 years36-50 years51 & above

Age No. of respondents Percentage%

Below 20 years16 16

21-35 years37 37

36-50 years28 28

51 & above19 19



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2) Profession of the respondents

professionals No. of respondent Percentage%

Professionals 76 74

Businessmen 10 10

Retired/vrs 05 05

others 09 09

76%

10%5% 9% Professionals

Businessmen

Retired/vrsothers



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3) Income wise analysis

Income level No. of respondent Percentage%

Below 1.5 lakh 23 23

1.5 lakh 3 lakhs 38 38

3 lakhs- 5 lakhs 22 22

5 lakhs & above 17 17

23%

38%

22%

17%

Below 1.5 lakh

1.5 lakh 3lakhs

3 lakhs- 5

lakhs5 lakhs &above



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4) Saving wise analysis

Saving level No. of respondents Percentage

Below 0.5 lacs 36 36

0.5 lac- 0.75 lac 27 27

0.75 lac- 1 lac 17 17

1 lac 1.5 lacs 11 11

1.5 lacs & above 09 09

36%

27%17%

11% 9%

Below 0.5 lacs

0.5 lac- 0.75lac

0.75 lac- 1 lac

1 lac 1.5 lacs

1.5 lacs &above



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5) Premium paying ability analysis

Premium amount No. of respondents Percentage

Rs. 1000 5000 23 23

Rs 5000 10000 26 26

Rs 10000 20000 34 34

Rs 20000 & above 17 17

23%

26%34%

17%

Rs. 1000 5000

Rs 5000 10000

Rs 10000 20000

Rs 20000 &above



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7) Policies preferred by the respondent

Policy No. of respondents Percentage

Money back 22 22

Endowment 38 38

Term 20 20

Children 08 08

Pension plan 10 10

Mutual fund plan 02 02

22%

38%20%

8%10% 2%

Money back

Endowment

Term

Children

Pension plan

Mutual fund



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8) Insurance as a viable instrument

Crite ria Excellent Good Average PoorRisk coverage

instrument42 30 28 00

Assured returninstrument

19 34 32 15

Tax savinginstrument

35 34 23 08

overall 32 31 27 10

0

5

10

15

20

25

30

35

40

45

Excellent Average

RiskcoverageinstrumentAssuredreturninstrument

Tax savinginstrument

overall



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10) People influencing buying decision

People No. of respondent Percentage%

Tax consultant 24 24

Family 20 20

Intermediaries 12 12

Self 30 30

friends 13 13

24%

20%12%

31%

13%Tax consultant

FamilyIntermediaries

Self

friends

Findings



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LIMITATIONS



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Limitations

1) Small size of sample - because of time consideration the sample size taken small,

which effects on the accuracy/ reliability of the research.

2) Peoples perception - some of the people misunderstood the researcher as an

insurance agent so they refuse to respond on the background of already getting

insured.

3) Limited time span - some of the respondent gave the appointments beyond the

research period therefore such people are excluded.

4) Lack inte res t in response - some of the people gave little time and shows lack

interest for filling the questionnaire.

5) False data - peop le provide false data as they were scared about providing actual

data such as net income , premium paid etc.

6) Appointments - getting appointments with people was difficult as most of the

people were busy and it was difficult to contact them again and again.



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RECOMMENDATION



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RECOMMENDATION

Recommendation on the basis of 4 ps

PRODUCT i.e Various insurance policies .

New product innovation should be always there. Company should design more

attractive policies / product compares to LIC and other private players company should

consider and should try more to concentrate to the customer whose annual income is less

than 1 lakh while designing the product.

PRICING STRATEGY

As far as this part is concern I can say that company can attract the customers

by designing lower premium, maximum benefits and by less exclusions in benefits

compares to other players.

PROMOTION STRATEGIES

As far as pune city is concern companies can promote their various insurance

products by using attractive hoardings at proper places, company can promote the

products by using various sales promotion activities like quiz, coupons with products etc

PHYSICAL DISTRIBUTION

The success in the marketing of products wel come to those insurers that become

more creative in capturing a wider range of customers by using multiple distribution

channels. It comes by proper recruitment, training and motivation to financial consultants



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and develop managers.

POSITIONING

Companies can make better positioning of various life insurance products

different specially compares to LIC in area like less exclusions in every product

maximum benefits, lower premium, new product innovation, better services, awareness

for customers toward product suitability is crucial to increase in market share.



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CONCLUSIONS

Conclusion



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1) Awareness - Most of the people I met and interviewed were aware of insurance

and were aware about top selling products like endowment and money back.

2) LIC verses future of private companies - Private players have big competition

with LIC. Therefore some of the respondents were doubtful about future of

private players.

3) Comparison of returns - Most of the people I met compare returns of life

insurance with bank Fds and postal savings.

4) Tax saving instrument - few people only consider insurance as a need and took it

for risk factor otherwise most of the people consider it to be a tax saving

instrument and look at return point of view.

5) LIC to private companies - Most of the people have LICs policy and it is

difficult to switch people to private companies policy.

6) Popularity of insurance - Insurance is very popular in pune. Investors are very

averse towards insurance because of one simple reason that the returns are

assured.



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BIBLIOGRAPHY



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ANNEXURE



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QUESTIONNAIRE

1) Personal information Name. Age/ D.O.B.Address.. Phone no

Qualification E-mail..

2) Financial informationGross income.. Savings.

3) Which of the following types of insurance policies are you aware of?a) Endowment b) money back c) Term plan d) children plane) Pension plan

4) Do you feel that you are fully insured?

a) Yes b) No

5) Where do generally invest your savingsa) Share market b) Banksc) PPF d) Mutual fundse) Insurance f) Postal savings

6) How do you treat insurance asa) Risk cover instrument b) tax saving instrumentc) Assured return instrument

7) What factors do you consider while deciding about insurance?a) Security / risk coverage b) children educationc) Tax benefits d) returnse) Retirement planning f) children marriage

8) How much premium you are willing to pay for insurance annually?a) 1000-5000 b) 5,000-10,000c) 10,000-20,000 c) 20,000 & above

9) By which channel you are more comfortable to insurance policy?a) Agent b) Banks

c) Advisors d) corporate agents

10) Who influence your buying decision?a) Tax consultants b) family membersc) Intermediaries c) self e) Friend



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