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EXECUTIVE SUMMARY
Someone has greatly said that practical knowledge is far better than classroom
teaching. During this project I fully realized this and come to know about the
present real world of Insurance sector. It includes all the activities involved in
providing insurance products to the final customers. I am pleased to know about
the consumers wants and competitors activities in the real world of Insurance. The
subject of my study is to analyze the present insurance sector and products offered
by LIC by applying various tools like cold calling and through direct interaction
with customers. I have also done research on the growth of private life insurancecompanies in the last five years.
The report contains first of all brief introduction about the company. Then it
contains the current status of private insurance companies and foreign insurance
companies in India.
I also put forward recommendations of the consumers and conclusions that will
help LIC to provide consumer satisfactory services in the insurance sector.
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CHAPTER 1
INTRODUCTION OF INSURANCE
A. Introduction
In law and economics, insurance is a form of risk management primarily used to
hedge against the risk of a contingent, uncertain loss. Insurance is defined as the
equitable transfer of the risk of a loss, from one entity to another, in exchange for
payment. An insurer is a company selling the insurance; an insured, or
policyholder, is the person or entity buying the insurance policy. The insurance
rate is a factor used to determine the amount to be charged for a certain amount of
insurance coverage, called the premium. Risk management, the practice of
appraising and controlling risk, has evolved as a discrete field of study and
practice.
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's
promise to compensate (indemnify) the insured in the case of a financial (personal)
loss. The insured receives a contract, called the insurance policy, which details the
conditions and circumstances under which the insured will be financially
compensated.
B. Principles of Insurance
1. IndemnityThe insurance company indemnifies, or compensates, the insured in
the case of certain losses only up to the insured's interest.
2. Insurable interest The insured typically must directly suffer from the loss.
Insurable interest must exist whether property insurance or insurance on a person is
involved. The concept requires that the insured have a "stake" in the loss or
damage to the life or property insured. What that "stake" is will be determined by
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the kind of insurance involved and the nature of the property ownership or
relationship between the persons.
3. Utmost good faithThe insured and the insurer are bound by a good faith bond
of honesty and fairness. Material facts must be disclosed.
4. ContributionInsurers which have similar obligations to the insured contribute
in the indemnification, according to some method.
5. SubrogationThe insurance company acquires legal rights to pursue recoveries
on behalf of the insured; for example, the insurer may sue those liable for insured's
loss.
6. Causaproxima, or proximate cause The cause of loss (the peril) must be
covered under the insuring agreement of the policy, and the dominant cause must
not be excluded
7. Mitigation In case of any loss or casualty, the asset owner must attempt to
keep the loss to a minimum, as if the asset was not insured.
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RESEARCH OBJECTIVE
The report gives the brief background of the sector and proceeds to highlight the
short comings of the existing setup and players. The benefits of liberalized sector
are enumerated. The report also tries to identify the market potential for insurance
products and the strategy that can we employed to exploit the same. The stress is
also given on knowing the awareness level of general public.
Spread Life Insurance widely and in particular to the rural areas and to the socially
and economically backward classes with a view to reaching all insurable persons in
the country and providing them adequate financial cover against death at a
reasonable cost.
RESEARCH METHODOLOGY
To conduct the market research first of all it is necessary to create a research
design. A research design is basically a blue print of how a research is to be
conducted, it may include;
1. Choosing the approach.
2. Determining the types of data needed.
3. Locating the source of data.
4. Choosing a method of data.
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HISTORY OF INSURANCE
The Britishers opened general insurance in India around the year 1700. The first
company, known as the Sun Insurance Office Ltd. was set up in Calcutta in the
year 1710.Insurance companies like Bombay Insurance Company Ltd was
established in 1793. In 1818 it was conceived as a means to provide for English
Widows. The Bombay Mutual Life Insurance Society started its business in 1870.
It was the first company to charge same premium for both Indian and non-Indian
lives. The Oriental Assurance Company was established in 1880. Till the end of
nineteenth century insurance business was almost entirely in the hands of overseas
companies. Insurance regulation formally began in India with the passing of the
Life Insurance Companies Act of 1912 and the provident fund Act of 1912.
Several frauds during 20's and 30's sullied insurance business in India. By 1938
there were 176 insurance companies. The first comprehensive legislation was
introduced with the Insurance Act of 1938 that provided strict State Control over
insurance business. The insurance business grew at a faster pace after
independence. The Government of India in 1956, brought together over 240 private
life insurers and provident societies under one nationalized monopoly corporation
and Life Insurance Corporation (LIC) was born. Nationalization was justified on
the grounds that it would create much needed funds for rapid industrialization.
The Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.
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Some of the important milestones in the life insurance business in India are:
1818: Oriental Life Insurance Company, the first life insurance company onIndian soil started functioning.
1870: Bombay Mutual Life Assurance Society, the first Indian life insurancecompany started its business.
1912: The Indian Life Assurance Companies Act enacted as the first statuteto regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable thegovernment to collect statistical information about both life and non-life
insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Actwith the objective of protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies are taken overby the central government and Nationalised.
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TYPES OF INSURANCE
1. Life Insurance
Life insurance provides a monetary benefit to a decedent's family or other
designated beneficiary, and may specifically provide for income to an insuredperson's family, burial, funeral and other final expenses. Life insurance policies
often allow the option of having the proceeds paid to the beneficiary either in a
lump sum cash payment or an annuity.
Annuities provide a stream of payments and are generally classified as insurance
because they are issued by insurance companies, are regulated as insurance, and
require the same kinds of actuarial and investment management expertise that life
insurance requires. Annuities and pensions that pay a benefit for life are sometimes
regarded as insurance against the possibility that a retiree will outlive his or her
financial resources. In that sense, they are the complement of life insurance and,
from an underwriting perspective, are the mirror image of life insurance.
2. Health InsuranceThe term health insurance (popularly known as Medical Insurance or Mediclaim)
is a type of insurance that covers your medical expenses. The concept of health
insurance is new in India but its awareness is growing fast. Health insurance
comes in handy in case of severe emergencies. Life is unpredictable, insurance
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can make it safe and secure from bearing huge financial loss. A health insurance
policy is a contract between an insurance company and an individual. Sometimes
it is associated with covering disability and custodial needs. The contract is
renewable annually.
Health insurance is affordable and carries the assurance and freedom from
insecurities that threaten normalcy now and then. The type and amount of health
care costs that will be covered by the health plan are specified in advance. Health
plans are available in two formats, individual and group plans. In an individual
policy you are personally the owner of the policy. While in a group plan, the
sponsor owns the policy and the people covered under it are called its members.
3. Fire InsuranceFire insurance is a form ofproperty insurance which protects people from the costs
incurred by fires. When a structure is covered by fire insurance, the insurance
policy will pay out in the event that the structure is damaged or destroyed by fire.
Some standard property insurance policies include fire insurance in their coverage,
while in other cases; fire insurance may need to be purchased separately. Property
owners should check with their insurance companies if they are not sure whether or
not fire insurance is part of their policies, and if fire insurance is not included, it
should be purchased. When purchasing fire insurance, people should be aware that
some types of fires may not be covered. For example, a fire caused by an
earthquake might be excluded from a fire insurance policy, as might a fire caused
by an act of God. It is important to read the terms of the policy carefully, and toask for clarification from the insurance representative if the terms are not clear. If
policy does not appear to meet the need, it should be renegotiated until it is
satisfactory.
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4. Marine insuranceMarine insurance is a type of insurance that covers boats and ships, as well as their
cargo and in some instances the places where the boat or ship is docked. It has a
colorful history, beginning informally in England during the 17th century. In 1906,
the Marine Insurance Act was passed under British law, creating a standard
operating procedure for policies that dictates the world's policies to this day. The
standards set forth by the act are considered reasonable, but due to changes in
technology and social standards, the act is generally seen as obsolete and is being
replaced by more modern legislature.
There are several varieties of insurance that can be taken out by a boat or ship
owner. Marine cargo insurance covers whatever goods the boat is carrying. Inland
marine insurance can be procured for floating vessels that are not ocean-bound, but
travel primarily on lakes, rivers and reservoirs. There are also more general
policies that cover the boat itself and its passengers, liability for damages to other
moving vehicles and liability during an encounter with a non-moving object. These
all fall under the heading of a marine insurance policy.
5. Credit insuranceCredit insurance repays some or all of a loan when certain circumstances arise to
the borrower such as unemployment, disability, or death.
Mortgage insurance insures the lender against default by the borrower.Mortgage insurance is a form of credit insurance, although the name "creditinsurance" more often is used to refer to policies that cover other kinds of debt.
Many credit cards offer payment protection plans which are a form of creditinsurance.
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Accounts Receivable insurance also known as Credit or Trade Credit insuranceis business insurance over the accounts receivables of the insured. The policy
pays the policy holder for covered accounts receivable if the debtor defaults on
payment
6. Vehicle insurance
Vehicle insurance protects the policyholder against financial loss in the event of an
incident involving a vehicle they own, such as in a traffic collision.
Coverage typically includes:
Property coverage, for damage to or theft of the car;
Liability coverage, for the legal responsibility to others for bodily injury orproperty damage;
Medical coverage, for the cost of treating injuries, rehabilitation andsometimes lost wages and funeral expenses.
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7. Home insurance
Home insurance provides coverage for damage or destruction of the policyholder's
home. In some geographical areas, the policy may exclude certain types of risks,
such as flood or earthquake, which require additional coverage. Maintenance-
related issues are typically the homeowner's responsibility. The policy may include
inventory, or this can be bought as a separate policy, especially for people who rent
housing. In some countries, insurers offer a package which may include liability
and legal responsibility for injuries and property damage caused by members of the
household, including pets.
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CHAPTER 2
INTRODUCTION OF LIFE INSURANCE CORPORATION OF
INDIA (LIC)
Life Insurance Corporation of India (LIC) was formed in September, 1956, by an
Act of Parliament, viz., Life Insurance Corporation Act, 1956, with capital
contribution from the Government of India.
The then Finance Minister, Shri .C .D. Deshmukh , while piloting the bill, outlined
the objectives of LIC thus to conduct the business with the utmost economy, and a
spirit of trusteeship; to charge premium no higher than warranted by strict actuarial
considerations; to invest the funds for obtaining maximum yield for the' policy
holders consistent with safety of the capital; to render prompt and efficient service
to policy holders, thereby making insurance widely popular. Since nationalization,
LIC has built up a vast network of 2,048 branches, 100divisions and 7 zonal
offices spread over the country. The Life Insurance Corporation of India also'
transacts business abroad and has offices in Fiji, Mauritius and United Kingdom.LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-
India ,Assurance Company Limited, Nairobi; United Oriental Assurance Company
Limited, Kuala Lumpur and Life Insurance Corporation (International) E. C
.Bahrain.The Corporation has registered a joint venture company in 26th
December,2000 in Katmandu, Nepal by the name of Life Insurance Corporation
(Nepal) Limited in collaboration with vishal Group Limited, a local industrial
Group. An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been
set up in 2001 to tap theAfrican insurance market.
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COMPANY PROFILE OF LIC OF INDIA
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LIC Operate All Over India
The Life Insurance Corporation of India popularly known as LIC of India
was incorporated on September 1, 1956 by nationalizing 245 Indian as well as
foreign companies. It was established 52 years ago with a view to provide an
insurance cover against various risk in life. the luminaries who spearheaded this
move at that time visualised an entity that will provide life insurance to Indians,
especially the vast rural masses, at an economical cost and channel the savings for
the betterment of the nation. It is the largest life insurance company in India and
also the countries largest investor. It is fully owned by the Government of India
and headquartered in Mumbai.
The subsidiary companies under LIC are:
LIC of India, International
A joint venture offshore company promoted by LIC, commenced its operation in
july1989. The primary objective is to the US-dollar denominated policies which
cater to the insurance needs of non-resident in Indians. It provides insurance
services to policyholders who residing in Gulf. The LIC International operates in
all Gulf Cooperation Council (GCC) countries.
LIC Nepal
A joint venture company formed in September 2001 with the Vishal Group of
Industries with a capital base of Rs.250mn. It is one of the largest capitalized
insurance companies of Nepal. It has joint share between LIC of India (55%)
Vishal Group (25%) and has a public participation to the extent o 20%.
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Life Insurance Corporation Lanka Limited (LICL)
A joint venture company formed in 2003 with the Bartleet Group of Companies, it
is one of the oldest and reliable institutions in Sri Lanka. The combined strengths
of these two formidable companies has enabled LICL to emerge as the premier
provider of Life Insurance in Sri Lanka. The Indian-based blue-chip also has
offices in UK, Mauritius, Fiji, and in all Middle East countries.
LIC Housing Finance
Incorporated on June 19, 1989; its main objective is to provide long term finance
for construction or purchase of houses or apartments. The company provides long
terms finance to individuals for purchase, construction, repair and renovation of
new \ existing flats\houses. It also provides finance on existing property for
business, personal needs and gives loans to professionals for purchase or
construction of clinics\ nursing homes\ diagnostic centers\office space and also for
purchase of equipments. It has set up a representative office in Dubai and Kuwait
to cater to the non- resident Indians in countries covering Bahrain, Dubai, Kuwait,
Qatar and Saudi Arabia. It has client group of over 9,40, 000prudent house owners
who enjoy the companys financial assistance.
LIC Housing Finance Limited Care Homes
It is a Wholly-owned subsidiary of LIC Housing Finance. It builds and operates
Assisted Community Living Center for senior citizens. It operates a
network of approximately 6 regional offices, 13 back offices, and 127marketing
offices.
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Vision
To emerge as a Transnationally competitive financial conglomerate of
significance to societies and be the pride of India .
Mission
Explore and enhance the quality of life of people through financial security by
providing products and services of aspired attributes with competitive returns and
by rendering resources for economic development.
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Products and Services of insurance companies
LIC has eight zonal offices and 105 divisional offices located in different parts of
India. It compromises of 2,048 branches and employs over 10, 02, 149 agents for
soliciting life insurance business from public. LIC has extended its activities in 12
countries from outside India, primarily to cater to the insurance needs of non-
resident Indians. LIC aims at strengthening it relationship with its vast customer
base by providing value-added service such as credit cards and offering premium
payment facility to the policyholders. It is the largest insurance player in India and
its objective is to channelize its funds for the benefit of the community at large. Itenjoys a near monopoly power in the solicitation and sale of life insurance policies
in India. The corporation has major business houses as clients, under the group
business of India. It has more than 1,18,000 corporate clients covering more than
3,15,00,000 members. Apart from the corporate group insurance business the
pension& group schemes is responsible for AamAadmiBimaYojna,a social
security schemes for the rural landless households under the aegis of the
Government of India.LIC has been investing a major portion of its funds in
socially-oriented sectors with a view to reach every insurable person in the country
and provide adequate financial cover against death at a reasonable cost. Another
goal is to mobilize peoples savings adequately attractive.LIC has recently tied
up with Policybazaar.com an insurance portal that enables the consumers to get
detailed information on the policy. It is one of the leading online non-life and life
insurance aggregator to sell its policy JeevanAastha on the internet.
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1. Flexibility
Flexibility to choose Sum Assured. Flexibility to choose premium amount .
Option to change level of Premium even after the plan has started (Top up facility).
Flexibility to change asset allocation by switching between funds.
2. Transparency
Changes in the plan & net amount invested are known to the customer.
Convenience of tracking one s investment performance on a daily basis .
3. Liquidity
Option to withdraw money after few years (comfort required in case of exigency).
Low minimum tenure . Partial / Systematic withdrawal allowed.
4. Fund Options
A choice of funds (ranging from equity, debt, cash or a combination). Option to
choose fund mix based on desired asset allocation.
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CHAPTER 3
PERFORMANCE OF LIC OF INDIA
The number of new policies marketed grew from 14.69 lakhs in 1961 to 2.18
croress in 2004-05 and the sum assured under this business rose to high of Rs.
1,79,886.66cr in 2004-05 from Rs.336.67 cr in 1957. The total funds of the
corporation also grew from Rs. 702.80 cr in 1961 to Rs. 4,16,910.36cr in 2004-05.
Investments , which were Rs. 329.74 cr in 1957 rose to a high of Rs.4,13,800.95 cr
in 2004-05 ,allof which gets deployed for the development of the nation.The LIC
has huge investible funds and the main source comes from the premiums collected
from the policy holders. The Corporation invests these funds in various states,
industries and also in various other countries. The LIC, while investing its funds,
has to consider various factors and forces such as safety, liquidity and productivity
of funds plus various other regulatory bindings in terms of investment norms,
asset- liability management etc. In short, the LIC has to make its investments
within the ambit of these bindings as a result, the corporation is not in apposition to
pursue a prudent investment policy due to which its investment income may come
under pressure. Adding fuel to the fire, the falling interest rate would also
adversely affect the investment performance of the Corporation. Still at present
LIC continues to be the dominant life insurer even in the post-liberalization phase
of the Indian insurance industry. It is on new growth trajectory surpassing its own
past records. The average premium growth so far has been 20%. With the targeted
Rs.1,75,000crores total premium by the end of current fiscal, The life insurance
giant is looking a market share about 75%. The corporation has crossed many
milestones and has set unprecedented performance records in various aspects of
life insurance business. The state- owned corporation is targeting a business of
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over Rs.3,00,000crores by2011-12. The life insurance major expects its assets size
to grow about Rs.6,00,000cr or 75% in the next three years. In the current fiscal
year, the company has recruited about two lakhs insurance agent across the
country, which is more than double of the 90,000 agents hired in the previous
fiscal. It has also hired 4,500 development officers in the current fiscal year and
5,000 new officers could be hired in the next fiscal. It has bagged various awards
which include Loyalty Award 2009, Golden Peacock Innovative Product/Service
Award 2009, Readers Digest Trusted Brand Award 2008 in the Platinum Category,
CNBC Awaaz Consumer Awards 2008 and NDTV Profit Business
Leadership Award 2008.
Economic Times Brand Equity Survey rated LIC as the No.1 service brand of the
country for the 5th consecutive year. In the chart below is shown the market share
of LIC and private in terms of total premium collected.
ACHIEVMENTS AND AWARDS
CNBC Awaaz Consumer awards 2010Reader Digest Trusted Brand
Insurance category 2010
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OUTLOOK MONEY -- NDTV PROFIT
AWARD 2009 in
" BEST LIFE INSURER CATEGORY "
World Brand Congress Award
Golden Peacock Innovative Product /
Service Award - 2009
ASIA PACIFIC HRM Congress, 2009
Award for INNOVATIVE HR
PRACTICES
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Loyalty Award - 2009NDTV Profit Business Leadership
Award 2008
INDY's Silver Award for Best Corporate
Film
NASCOM IT USER Award 2008
Business Superbrand India 2009 ASIA BRAND CONGRESS BRAND
LEADERSHIP AWARD, 2008
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INVESTMENT PORTFOLIO OF LIC
The Life Insurance Corporation of India has been a nation builder since its
formation in 1956. True to the objective of nationalization, the LIC has mobilized
the funds invested by the people in the life insurance for the benefit of the
community at large. The corporation has deployed the funds to the best advantage
of the policyholders as well as the community as a whole, true to the spirit of
nationalization. National priorities and obligation of reasonable returns to the
policyholders are its main criteria for the investment. The total funds, so invested
for the benefit of the community at large accumulated to Rs 751129 crores(provisional) as on 31st march 2008. The investment of the corporations funds
is governed by Section 27A of the insurance act, 1938 subsequent
guidelines/instructions issued there under by the Government of India from time to
time and the IRDA by way of regulations. As per the prescribed investment pattern
approved by IRDA, the controlled funds are invested as follows : Not less than
50% is invested in Government securities or other approved investments. Not less
than 15% is invested in infrastructural and social sector investments. Not less than
35% in other investments, to be governed by exposure prudential norms.
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CHAPTER 4
PRODUCTS OF LIC
INSURANCE PLANS
As individuals it is inherent to differ. Each individual insurance needs and
requirements are different from that of the others. LICs Insurance Plans are
policies that talk to you individually and give you the most suitable options that
can fit your requirement.
CHILDREN PLANS
Jeevan Anurag
Komal Jeevan
Jeevan ChaayaChild Future Plan
Child Career Plan
PLAN FOR HANDICAPPED DEPENDENTS
JeevanAdhar
JeevanVishwas
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ENDOWMENT ASSURANCE PLANS
Jeevan Anand
Jeevan Amrit
The Endowment Assurance Policy
Jeevan Mitra(double cover endowment plan)
Jeevan Mitra(triple cover endowment plan)
PLANS FOR HIGH WORTH INDIVIDUALS
Jeevan Shree-I
Jeevan Pramukh
MONEY BACK PLANS
The Money Back Policy- 20 yearsThe Money Back Policy- 25 years
Jeevan Surabhi-15 years
Jeevan Surabhi-20years
Jeevan Surabhi-25 years
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WHOLE LIFE PLANS
The Whole life policy
The Whole life policy-limited payment
The Whole life policy-single premium
Jeevan Anand
TERMS ASSURANCE PLANS
Two Year Temporary Assurance Policy
The Convertible Term Assurance Policy
Anmol Jeevan-IAmulya Jeevan-I
PENSION PLANS
Pension Plans are Individual Plans that gaze into your future and foresee financial
stability during your old age. These policies are most suited for senior citizens and
those planning a secure future, so that you never give up on the best things in life.
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PENSION PLANS
Market Plus-IJeevan NidhiJeevan Akshay-VINew Jeevan Dhara-INew Jeevan Suraksha-I
UNIT PLANS
Unit plans are investment plans for those who realize the worth of hard-earned
money. These plans help you see your savings yield rich benefits and help you
save tax even if you don't have consistent income.
UNIT PLANS
Market Plus-I
Profit Plus
Money Plus-I
Child Fortune Plus
JeevanSaathi Plus
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SPECIAL PLANS
LICs Special Plans are not plans but opportunities that knock on your door once in
a lifetime. These plans are a perfect blend of insurance, investment and a lifetime
of happiness!
GOLDEN JUBLIEE PLAN
New Bima Gold
HEALTH PLAN
Health Protection Plus
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CHAPTER 5
SERVICE QUALITY
Your Policy Bond And Its Safety Your Policy Number Policy ConditionsAlterations In Policy If Your Policy Is Lost Your Contact AddressKeep Us Posted Without Fail Admission Of Age Nomination Assignment When To Pay The Premiums Grace Period For Premium Payment How And Where To Pay The Premiums Policy StatusWhere Available Revival Of Lapsed Policies Availing Loans On Policies Surrender Value
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Your Policy Bond and Its Safety
The policy bond is the document that is given to you after we accept your proposal
for insurance. The risk coverage commences after acceptance of your proposal and
the conditions and privileges of your policy are mentioned in the policy bond. This
is an important document which would be referred to for various servicing
interactions with youKeep the policy bond safe. It will be required at the time of
settlement of claims on the policy. You will also require it if you are availing a
loan or want to assign the policy. Inform your spouse/Parents/Children as to
where the policy is kept. In case you are handing over the policy bond to any
person or office, please take a written acknowledgement. Keep a Photostat copy of
the policy for your reference.
Your Policy Number
The policy number is consisting of nine digits and can be found at the top left hand
corner of the schedule of your policy bond. This is a unique identification number
that distinguishes your policies from other policies and will remain unchanged
through out the lifetime of the policy. Remember to quote the policy number every
time in your correspondence, as it helps us to locate your records for reference.
Policy Conditions
Every policy is taken for different types of needs; therefore the conditions for your
policy will vary according to the Plan and Term of the policy. The policy schedule
contains on the first page of your policy, like the ones mentioned above as well as
other information like nominee, your address etc. It also shows the date of
commencement of your policy, date of birth, date of maturity, due dates and
months in which the renewal premiums are to be paid etc. The second page
onwards carries the various policy conditions like risk coverage, additional risks
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coverage if opted for, standard benefits that are available for all policies, accident
benefit if opted for, exclusion of risks if any and other conditions that govern the
contract of insurance. Apart from death benefits there are other standard benefits
and benefits opted by the policyholder.
Alterations In Policy
There may be instances when you would like to make alterations in your policy
like change of premium payment mode, reduction in premium paying term etc.
your applications may be given in writing to the branch that services your policy
for our further action.
If Your Policy Is Lost
Kindly make a thorough search before concluding that you have lost the policy
bond. Look for the same within your residence, among your investment papers, at
your office and even with your agent to whom you might have entrusted
the document for some reason. It could have been even pledged with LIC/any other
financial institution for availing a loan by you. LIC retains the policy bond when
you go in for a loan against the policy. Make sure that the document you are
searching is not one that has already been assigned to LIC, or to another financial
institution. If the policy bond is partially destroyed due to natural causes like, fire,
flood, etc, the remaining portion may be returned as evidence of loss of policy to
LIC, while applying for a duplicate policy. In case you are sure that the policy
bond is untraceable due to unknown causes, there is a simple procedure to comply
with while applying for the duplicate policy at the branch that services your policy.
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Your Contact AddressKeep Us Posted without Fail
Your address is very important for us. Without your latest address we would not be
in a position to contact you for any service offering. We would not like to keep any
benefit that is due to you pending for want of this very important information.
Whenever you shift residences, please inform the new address to us. Other wise
any communication we send to you, like premium notices, discharge vouchers for
maturity and survival benefits etc., will get delayed in reaching you.LIC provides
for change of addresses, inclusion of telephone numbers, mobile numbers and
email addresses in your contact addresses information. Kindly inform your
servicing branch to incorporate the same in your policy records.
Admission of Age
Check your policy bond and see if your date of birth is correctly given there in.
This is one of the factors on which the premiums you pay for your policy is arrived
at. This would also form the basis of all future policies you might avail from us. In
case your earlier policies do not have your date of birth incorporated and you do
have a date of birth certificate issued by the competent authority, you may send an
attested copy of the same to us, with a request to admit your age .
Nomination
Ensure that the nominees name is correctly incorporated in the policy bond. You
may change the nomination in your policy any time during the lifetime of the
policy In case you have not included the name of the nominee till now, please do
not delay; inform us your nomination immediately. Kindly note that the change of
nomination has to be done in the branch that services your policy. The nominee is
the person to whom the insurance claim amounts would be payable, in case
anything unfortunate within the purview of the policy conditions happens to you.
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The policy is usually taken by you to benefit your family nominate the persons
wholl have the welfare of your family in your absence; the usual preferences
being spouse and children. You may nominate even minors like your children, in
which case you have to name another person wholl have the welfare of the minor
children, as an appointee.
Assignment
In case you are raising a loan against your policy from LIC or any other financial
institution, your policy would have to be assigned to LIC or the financial
institution. When you assign the policy the title of the policy is shifted from your
name to that of the institution. The policy would be reassigned to you on
the repayment of the loan. A fresh nomination should be done after reassignment
of the policy. Assignment of policies can be done even when a loan is not required
or for some special purposes.
When to Pay the Premiums
Remember to pay your premium in time, even if our notices do not reach you.
There may be a postal delay.LIC usually sends premium notices one month in
advance to the due month of the premium. The months in which premiums are due
are given on the first page of the Policy bond.
Grace Period For Premium Payment
In case you have not paid the premium within the due date there is still time for
you to make the payments without payment of interest on the premium. This
period is called the grace period. (With the exception of some plans)The grace
period for policies where the premium payment mode is monthly is 15 days from
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the due date. The grace period for policies where the premium payment mode is
quarterly, half-yearly or yearly is one month but not less than30days.
How and Where To Pay the Premiums
By cash, local cheque(subject to realization of cheque),Demand Draft at Branch
Office.
The DD and cheques or Money Order may be sent by post.
You can pay your premiums at any of our Branches as 99% of our Branches are
networked.
Many Banks do accept standing instructions to remit the premiums. So by
providing a standing instruction to your Bank to debit your account for the
premium amount and send it vide a banker scheque to LIC, on the due dates and
months mentioned on your policy bond.
Through Internet : Payment of premiums can be made through Internet through
Service Providers viz. HDFC Bank, ICICI Bank, Times of Money, Bill Junction,
UTI Bank, Bank of Punjab, Citibank, Corporation Bank, Federal Bank and Bill
Desk.
Premium payment can also be made through ATMs of Corporation Bank and UTI
Bank. Premium payment can also be made through Electronic Clearing Service
(ECS) which has been launched at Mumbai, Hyderabad, Chennai, Kolkata, New
Delhi, Kanpur, Bangalore, Vijaywada, Patna, Jaipur, Chandigarh, Trivandrum. A
policyholder having an account in any Bank which is a Member of the local
Clearing House can opt for ECS debit to pay premiums. The policyholders wishing
to use this system would have to fill up a Mandate Form available at our
Branches/DO and get it certified by the Bank. The certified Mandate Forms are to
be submitted to our BO/DO.
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Policy can be anywhere in India
Citibank Kiosks at Industrial Assurance Building, Church gate, New India
Building, Santa Cruz, Jeevan Shikha Building, Borivili are dedicated for collection
of premiums through cheques.
Policy StatusWhere Available
Status of your policy indicates if your policy is in force or has lapsed due to non-
payment of premium. It also provides other important information with respect to
your policy, for your reference. The status of your policy is available at the branch
that services your policies. It is also available through our Interactive Voice
Response Systems in select cities In cities connected by our computerized
networks the status will be available in any of the branches. Now the policy status
of policies being serviced in the cities connected by network are also available
through Internet In select cities online touch screen kiosks are also provided where
you can view your policy status.
Revival of Lapsed Policies
If your policy has lapsed due to non-payment of premiums within the due date,
the terms and conditions of the policy contract are rendered void, till you revive
your policy. A lapsed policy has to be revived by payment of the accumulated
premiums with interest as well as giving the health requirements as required.
Always keep your policy in force to ensure that your family gets their financial
protection assured by your policy. However certain concessions dependent on the
term for which you have paid the premiums are available with the exception of
some plans for claims concession.
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Availing Loans on Policies
Many of our plans are of endowment type and you would be allowed to raise
a loan against your policy should you require funds. You repay the loan with
interest or continue paying the interest and allow the loan to be deducted at the
time of the claim payments. Further loans on policies are also allowed after
deduction of earlier out standings Most financial institutions too allow loans
against LIC policies based on the value LIC quotes on request from you.
Surrender Value
This is the value which is the amount payable to you should you decide to
discontinue the policy and encash the same from LIC. Surrender value is payable
only after three full years premiums are paid to LIC. More over if it is a
participating policy the Bonus get attached to it as per prevalent rules. Surrender of
policy is not recommended since the surrender value would always
be proportionately low. Should you decide to go in for insurance at this stage
further insurance would be available to you at a much higher premium because
your age would have advanced since taking out the earlier policy.
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INFORMATION TECHNOLOGY IN LIC
IT policy flows from the business and social objectives. IT usage covers all
business activities of the organization. This includes finance, investment, product
development, actuarial, underwriting, customer relationship management,
marketing, policy servicing, human resource development, office servicing,
and estate management. Its role is not to automate processes. Rather, it is a
strategic tool to simplify procedures and revamp processes. This helps create a
very efficient customer service management system. It not only provides
anywhere, any time service, it also provides greater accountability, transparency
and responsiveness in all business processes. In todays world, IT is a must for any
industry to keep pace with the customers changing expectations. This is especially
relevant in the service industry. The insurance sector has to ensure that the
technology it chooses does not lag behind where customer expectations are
concerned. In our case, LIC has more than 16crore policy holders. So it has to
induct the best IT products available and use them to cater to the needs of the
customers and deliver anywhere any time service on demand and to add value to
its new products. The trust and the goodwill of the customer gained in the last
50 years have to be consolidated by making all activities more customer-focused.
For instance, LIC has a corporate Web site to provide information on products,
services, policy status, grievances and premium calculator. Other facilities
include touch-screen information kiosksat central locations to provide 24 x 7
inquiry services to customers.
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CHAPTER 6
DEPARTMENTAL DETAILS OF LIC
The organization having a such a huge size has to have a well defined hierarchical
structure and LIC is not an exception to this fact. A well defined proper
organization structure with officials with exact knowledge of their duties is a must
for an organization to prosper. LIC has a vast network of offices across the length
and breadth of our country and abroad so it has defined and maintained its
organizational structure in the following way. LIC has its main central head office
at Yogaakshema Jeevan bimamarg at Mumbai. Then it is followed by
eight zonal offices namely central zone, eastern zone, east central zone, northern
zone, north central zone, southern zone, south central zone, western zone
respectively. After these eight zonal offices there are several divisional offices
under each zonal office and these divisional offices are mostly in each big city. At
last comes the branch office and there are several branch offices under each
divisional office. At all the branch offices there is a branch manager and severaldepartments and the major function of these branch offices is sales and servicing of
the policies. In a branch office the top most is a branch manager and under his
control are seven different departments with each of these departments functioning
independently to each other.
These seven departments are as follows :
1. Sales DepartmentThis department is mainly concerned with the sale of new policies and is
headed by Assistant Branch Manager Sales(ABMS). The internal agent of LIC
is the Development Officer who has the job of communicating and training the
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Free Lancing agents. It is the development officer who continuously
encourages the agents to get new business and the income, performance and
commission through policy selling comes under the jurisdiction of this
department.
2. New Business DepartmentThis department performance the very important function of underwriting new
policies which are sent to it for authentication. It checks that all the information
provided by the customer is true and the proposal form and all other details and
proofs are legal. After scrutinizing the new policy it issues the first premium
receipts(FPR) and then issues the policy bond. If anything is found insufficient
the proposal form is sent back to the sales department to correct the mistake
and again submit it.
3. Policy Service DepartmentAfter the policy bond is issued, the case is passed on to this department to take
care of after sales service of the policy. It takes care of the premium dates and
if the policy is lapsed then its revival is done by this department. Also if any
loan is required by the customer against his/her policy then its approval has to
be given from the policy service department only.
4. Accounts DepartmentIt is responsible for processing of all the cheques and loans which come to it.
The details regarding financial aspects are covered under this department .
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5. Claims DepartmentAll types of claims i.e. survival benefit claim, maturity claim and death claim
are settled by this department. In case of death claim if death occurs after three
years then no investigation is involved in the settlement process and if it occurs
before three years then proper investigation is done and the claim is considered
to be an early claim case.
6. Micro DepartmentThis department has the all important function of co-ordinating with each
department. Each day s business is collected and its four copies are made
and one copy is sent to the divisional office, second is submitted to the branch
manager, third remains with the incharge of micro department and fourth in the
branch office.
7. Office Service DepartmentThis department takes care of all miscellaneous tasks of office and dispatch of
cheques, loans etc come under the responsibility of this department.
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Impact of the financial crisis on Life Insurance Corporation
LIC is a public sector insurer and a domestic investor. As such, we are not directly
affected by the global financial crisis. However, the volatility in Indian financial
market due to the uncertainty in global markets may affect returns we get on our
investments. But LIC has an indisputable record of prudently planning its
investments and getting the maximum returns on thepolicyholders money. We
will continue to do that in any type of scenario. Why has the new business growth
slowed? What will be the impact of the lower growth on LICs performance? Will
it affect ratios? Total premium growth of LIC has always been quite stable, even
when there are periodical ups and downs in new premium income. Last year, we
ended the year with around 10% growth in First Premium income despite several
odds. However, the growth in total premium income was quite healthy, indicating
better conservation ratio. Our overall expense ratio is the least in the industry. Last
year, I was only 11.94%, and it was just 5.56%, excluding the commission. The
surplus generated was a record high of Rs16,598.65crore, which enabled us to
give higher terminal bonus to our with profit policyholders and to increase
dividend to the government. Having said that, I agree that there has been a decline
in the new premium in the current financial year. One of the reasons was that after
withdrawal of our successful old plans, we did not immediately introduce any new
ULIP. Since then, we have launched new products and the response has been very
positive and encouraging. Also, we had some issues with the union of development
officers, which have been more or less sorted out through series of consultations
and discussions. In September, the figures have started picking up, and I am sure,
we will recapture the lost ground very soon. Private insurers are growing their
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market share by growing distribution. LIC is close to saturation level in terms of
distribution. How will you retain the market share? It is not accurate to say that
LIC has reached its saturation point in terms of distribution, as we are expanding
our reach and network. Other insurers are perhaps expanding very fast and the
effect is reflected in their balance sheets. We do have constraints of capital and any
growth has to be supported by internal accruals only. Hence, we follow the policy
of steady and profitable growth and distribute 95% of surplus to our with profit
policyholders. Such a practice makes our products better. And I am sure, this will,
in the long run, determine who becomes winner in the life insurance market in
India. How do you propose to comply with IRDAs decision to cap single
company exposure at 10% of a companys capital? First of all, let me say that new
regulations are not only about equity exposure, but encompass several other
aspects too. Second, these norms are not just LIC-centric, but applicable to the
whole industry. Our total assets of more than Rs 8-lakh crore are our legacy built
on the basis of earlier regulations and norms under the Insurance Act. We have
always followed applicable norms in our operations and we have an impeccable
track record of being a prudent investor, keeping in view the best interests of our
policyholders. New investment norms have several changes from the earlier one
and we are working on them and are in touch with IRDA where we have problems.
Will the exposure limit force LIC to divest in blue chips and invest in companies
that have a lower credit rating?
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CHAPTER 7
CASE STUDY OF SWOT ANALYSIS ON LIC
The SWOT analysis involves an in depth study of the strength and weakness of
the provided organization and it also provides information to the promoter,
consultant, other agencies and helps in long term viability of the project.
Strength:
It is the oldest and most well experienced player having a Pan Indiapresence.
LIC has a strong and very well developed distribution network. It is having a huge consumer base and is evolved as one of the most
powerful brands of the country.
It has a large product portfolio and claim settlement is easier to get. It has the advantage of government guarantee is accompanied with it. Largest insurance Company in the world in Customer Base (23 crore
customers)
No.1 insurance company in the world in terms of agency (about 1.1 Millionagents)
LIC is No.1 insurer in the world in Volume & Sold around 3.75 Cr.Policiesin 2007-2008.
2nd Biggest Real Estate Owner next to Indian Railways. LIC is one of the Highest income tax playing Organization. For Financial
Year 2007-08, LIC has paid advance Tax Rs.2627. 14 Cr. & Service Tax
Rs.1292. 15 Cr.
Has Highest insurance Professionals ( Club Member agents )
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Only 4 countries in the world have more population that LIC`s policyholders.
No.1 insurance Company in the world in terms of claims paid. LIC Settles 2.21 claims per second, LIC settled 139 lakhs claims during the year
2007-2008.
Prompt settlement of claims (97% maturity claim settled on or before due date) One of the Lowest outstanding Claim Ratio in the world ( Maturity+S B Claim-
0.07%)
Advanced Technology-For better Customer Service
Computerized and networked 2048 branch offices and 159 satellite officesthroughout the country.
Use of High Tech-WAN,LAN,IVRS & EDMS LIC is second largest PC user in the country. EDMS to make LIC a paperless office- Enabling Policy servicing & payments
through all branchs in the country.
Premium Payment Facility extended through networked 2048 branches, ECS,ATM's through internet, online portals, collecting bank (Axis Bank), AP online,
through SMS, through selected agents, Now LIC Premium can also be paid
through.
"Suvidha info Serve KIOSKS" all over India. Policy Holder's Portal allow on line access to policy status and other details. Info centre set up in 12 cities for customers to interact easily. Dial-1251 for
details.
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45 interactive Voice Response System (IVRS) centers all over the country toprovide information on policy servicing. Facility is available 24 7, Facility can be
availed on following phone Nos. 1251 OR 020-25514248.
Social Strength:
LIC - an institution builder promoting many financial and insurance institutes likeNSE, NCDEX, LIC Mutual Fund, Stock Holding Corporation of India, National
insurance Academy, insurance institute of India etc.
LIC has foreign operations in Mauritius, Fiji and London and has joint venture operating in Sri lanka , Nepal, Bahrain & Saudi Arabia. New offices will
be hortlyoprned in Australia, USA & Canada.
LIC is known as "Pension Provider" of the country. 1st Pension company in India is floated by LIC as "LIC Pension Fund Ltd" on 21st
Nov 2007.
First to create waves in micro insurance sector by insuring people below thepoverty line. In year 2007-2008, 8.54 lac policies sold through "Jeevan
Madhur"Plan.
Widest range of plans (about 48) for every need of the customer of 0 to 79 years ofage.
Biggest Portfolio of Group insurance schemes available. "Jeevan Saral" one of the product of LIC got "Best innovation product " award
from I.R.D.A.
LIC has covered lick Risk of 1.13 crore citizens through "AAM ADMI BIMAYOJANA" &" JANASHREE BIMA YOJANA".
Very Unique Salary saving Portfolio. Highest Number of Corporate Clients in Group insurance Scheme. Expending Distribution Channel through Bancassurances, Corporate Agencies,
Broker ship & Chief Life insurarance Advisor (CLIA).
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New East - Central Zonal Office opened at patina to cater to the needs of states ofBihar, Jharkhand and Orissa. 5 new Divisional offices were also opened in 2007-
08. Pune D.O. was splited in 2 divisions, viz Pune Division (i)
and Pune Division (ii). "Golden Jubilee Foundations" established for undertaking charitable activities
like education, health, relief of poverty etc.
People's Money for People's Welfare
LIC invested more than 11,630 crores, in infrastructure sector is Rs.56,691crores In socially oriented sector like water, drainage & housing etc, LIC has invested
Rs.5,635crores during 2007-08 & total investment in this sector is Rs.32,321
crores.
Total investment in Social Sector Rs.89,000Crs. Different incentive schemes for villages, Schools and Banks under Bima Gram,
Bima School and Bima Banks.
Total investment in Nation Building Activities is 5,76,000Crs.
Financial Strengths:
LIC's investment income in 2007-08 was Rs.40,655crores . Out of Total income ofRs,1,76,559.28Crs.
Total Assets of the corporation as on 31.3.07 were Rs.6,74,514.78Crs . Largest institutional investor in Share Market. On an average Rs.100 crore
invested every day. During the year 2007 LIC earned the profit Rs.10,000Crs.
from the Sale of Equity.
Largest Financial institutional investor both Equity market & Term House.
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Weakness:
Its employees and other staff are lethargic and least motivated to renderprompt and sincere customer service.
After sales customer grievance redressal mechanism is inefficient. Agents not taking into account the needs of people and promote policies
having high commissions only.
Very slow decision making process and internal problems between topmanagement and lower cadre staff.
The top management or bosses are mediocre and there is large scalecorruption in main office.
The development officers and agents who are the foundation pillars of LICare not provided with extra funds and powers to promote its products
aggressively.
Opportunity:
Emergence of a huge middle income consumer market in the country. People becoming more aware and demanding so there is scope for a whole
lot of innovative products.
Pension markets, health insurance and large real estate portfolio. Todays human life becomes full uncertain, so they prefer protection against
the risk. Therefore they prefer life insurance. This is the opportunity for the
life insurance sector.
Easy accesses to development in the more advance market provide furtheropportunity to upgrade their working.
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Technological, financial or specific area based avenues of absorbingimproved system are also now more easily available.
So, that insurance companies working efficiently and fast service.
Increased economic activities: increase in the economic activity has becomethe opportunity for the life insurance sector. The activity such as
development in the automobile industry, development in the shipping
industry. The growth in the GDP shows the opportunity for this industry.
The growth rate expected this year7-7.5%. So this is also one of the
opportunities for the life insurance sector.
Uncovered market: The Indian insurance market is the one of the leastmarkets in the world. India has a population 1044.15 million out of which
only 77.7 million have a life insurance policy. Almost 300 million people in
the country can afford to buy life insurance but of this only 20 % have an
insurance cover. Thus there lies a big opportunity for the life insurance
industry.
To enter into rural market where customer awareness about insurance is lowby effective and efficient marketing strategies.
To sell insurance products through electronic Medias. Natural calamities: natural calamities taking place now days have created a
concern for life insurance among the public. Because of natural calamities
like earth quake, flood, and cyclone people have become conscious about
benefits and need of insurance.
Growing population: the growth in the population (approximately 1.7%) isvery high. It is said that one Australia is added in our country every year.
Thus potential customers for the life insurance industry. It has become an
opportunity for the life insurance industry.
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The lack of comprehensive social security system combined with awillingness to save means that Indian people demand for pension products
will be large. Thus, it has become an opportunity for the life insurance
industry.
India has traditionally been a highly savings oriented country. Needless tosay, if the insurance market is properly tapped, it is possible to raise life
insurance premium as a percentage of GDP from its existing level. Thus, it
has become an opportunity for the life insurance industry.
To use Internet and e-commerce technologies to dramatically cut the costsand/ or to pursue new sales-growth opportunities. With the help oftechnology it has become easy for the companies to reach the customer
quickly, easily, efficiently and in a better way. Also the companies can cut
down the cost of operation up to considerable level. Thus technology has
thrown lots of opportunity for the company.
Liberalized government policy toward insurance sector: the government hasliberalized the government policy in the life insurance sector. Now a day
role of government has changed. Due to liberalized policy of government the
country is benefited in earning foreign inflows: the domestic company can
also collaborate with foreign country and can create synergy. Thus there is
great opportunity for those who can trap it. Exist the option of joint
venture& alliance etc. for companies to create Synergy, value as well as
competitive capabilities for the firms.
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Threats:
Private entrants are naturally targeting the profitable and more lucrativesegments, by providing better service, new products and flexibility. They are
targeting the bigger corporate the other clients in the well established
metropolitan center. These new entrants succeeded in eating share of the
existing entities. This creates threat among rival firms itself.
Decreased in bank rate: the decreased bank rate is the biggest threat for thelife insurance sector. Fluctuation in the bank rate makes big difference for
the life insurance industry. It has become threats for the life insurance
industry. Interest rate of P.F and bank saving create threat to insurance sector. All
other saving is obviously the threat for life insurance sector.
Increasing intensity of competition among industry rivals-may causesqueeze(fall) on profit margins. Consumers education- consumers are more
and more confused because the market players are offering large number of
product range. As at present the awareness level is not much, it is only
because the education level is only 62 %( in which only 10% are well
educated).
Fraud in insurance sector: the major problem fraud, which affects the lifeinsurance sector.
The flight of talent to new entrants is already in evidence, and could be onthe rise for some time to come. Retaining qualified and competent
executives will be considerable challenges for existing companies.
One very serious danger that the government on units is likely to face is thateven if at some point of time, the government does decide to disinvest a
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portion of its equity; they may not be fully free from government
interference.
They could face a peculiar problem that although paper and in terms oflegal definition they would not be public sector units. In effects, their
working could be no different from what it was before their ownership
pattern change. This could be genuine threats since they would be
competing with units which are free from such artificial and unnecessary
restrictions.
The new units, equipped with state of arts equipment and innovativeprocedure would have an in-built edge over the erstwhile public sector units,which until recently had no such opportunity and incentives. Due to possible
negative impact on employment, there were no serious efforts at updating
technology and equipment. The resultant inadequate investment in
infrastructure could lead to their lagging behind in the race.
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CHAPTER 8
QUESTIONAIRE AND FINDINGS
QUESTIONNAIRE ANALYSIS
Respondents = 80
Respondents Responded = 60
ResponseRate=75%
Respondents are taken from private, government and business sectors.
1. According to you, which have played a major role in the field of life insurance
companies?
private
employees
govt.
employees businessman
LIC 10 13 10
HDFC 5 3 5
ICICI 3 3 4
OTHERS 2 1 1
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After analyzing this data it is found that from the given three respective level of
Pvt. Govt. and Business 10 out of 20 (30%), 13 out of 20 (39%) and 10 out of 20
(30%) are in favour of LIC, while 5 out of 20 (15%), 3 out of 20 (9%) and 5 out of
20 (6%), 1 out of 20 (30%) and 1 out of 20 (30%) are in favour of other Pvt.
Companies.
2.Which insurance companies have been successful to make strong public base by
advertisement?
Private
employees
Govt
employees
Business
man
LIC 12 14 12HDFC 3 2 4
ICICI 4 3 3
OTHERS 1 1 1
0
2
4
68
10
12
14
LIC
HDF
CICICI
OTH
ERS
private
employees
govt. employees
businessman
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From the above table, it is found that from the given three sector Private, Govt. and
Business 12 out of 20 (36%), 14 out of 20 (42%), 12 out of 20 (36%), are in the
favour of LIC. 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in
favour of HDFC, whereas only 1 out of 20 (3%), 1 out of 20 (3%) 1 and out of 20
(3%) favour others company.
3. Which insurance company has gained massive public support in the
current fiscal year?
Private
employees
govt.
employees businessman
LIC 12 14 10HDFC 3 2 5
ICICI 3 2 4
OTHERS 2 2 1
02468
1012
1416
LIC
HDFC
ICICI
OTH
ERS
Privateemployees
Govt employees
Business man
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From the above table, it is found that from the given three sector Private, Govt. and
Business 12 out of 20 (36%), 14 out of 20 (42%), 10 out of 20 (30%), are in the
favour of LIC 3 out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) are in
favour of ICICI, whereas only 2 out of 20 (6%), 2 out of 20 (6%) 1 and out of 20
(3%) favour others company.
4.Do you think insurance policy is in the direction of public welfare?
Private
employees
Govt.
employees Businessman
YES 13 16 12
NO 7 4 8
0
2
4
68
10
12
14
LIC HDFC ICICI others
Private
employees
govt. employees
businessman
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56
The above table shows that from private sector 13 out of 20 (30%) agree and 7 out
of 20 (21%) disagree, from govt. sector 16 out of 20 (48%) think it right but 4 out
of 20 (12%) dont thick it so and from business man 12 out of 20 (36%) are in
favour of the above statement but 8 out of 20 (24%) dont favour it.
5.Is retirement bond or pension policy launched by the number of private player as
well as public sector Company in the direction of secured old age?
Private
employees
Govt.
employees Businessman
YES 15 18 13
NO 5 2 7
0
5
10
15
20
Private employees Govt. employees Businessman
YESNO
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It is obvious from the above table that 15 out of 20 (45%), 18 out of 20 (54%) and
13 out of 20 (39%) from the given three think retirement bend or pension policy a
legitimate step in the direction of secure old age but 5 out 20 (15%), 2 out of 20
(6%) and 7 out 20 (21%) dont agree with the opinion of the majority class.
6. Do you think that risk coverage factor included in Insurance policy
attracts general public towards the policy?
Private
employees
Govt.
employees Businessman
YES 12 16 11
NO 8 4 9
0
5
10
15
20
Private
employees
Govt.
employees
Businessman
YESNO
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From the above table it is found that 12 out of 20 (36%) from Private sector 16 out
of 20 (48%). From Govt. sector and 11 out of 20 (33%) thinks risk coverage factor
attractive but rest 8 out of 20 (24%), 4 out of 20 (12%) and 9 out 20 (27%) from
the above them sector dont think it so encouraging towards saving trend whereas 3
out of 20 (9%), 2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.
7. What according to you, the term plan that only covers risk and doesnt
cover maturity benefit on survival at the end of the term provides security
cover over policy holders or a smart way of accumulative money from
policy holders?
Private
employees
Govt.
employees Businessman
security cover 12 16 11
accumulative
money 8 4 9
05
10
15
20
25
Private
employees
Govt.
employees
Businessman
NO
YES
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It is obvious from the above data that 11 out of 20 (33%), from the Pvt. Sector, 15
out of 20 (45%) from Govt. sector and 12 out of 20 (36%) think term plan as a
security cover but 9 out of 20 (27%), 5 out of 20 (15%) and 8 out of 20 (24%) from
the three respective group think it as a way of accumulating money insurance
company.
8. Do you think that the arrival of so many private companies in this insurance
sector envisage a lot of choice to policy holder?
Private
employees
Govt.
employees BusinessmanYES 16 18 16
NO 4 2 4
0
5
10
15
20
Private
employees
Govt
employees
Business
man
Security Cover
Accumulative
Money
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From analyzing the above data it is found that 16 out of 20 (48%) from Pvt. Sector,
18 out of 20 (54%) from Govt. sector and 16 out of 20 (48%) think that the arrival
of private players envisage a lot of choice to policy holder. But 4 out of 20 (12%),
2 out of 20 (6%) and 4 out of 20 (12%) dont think it so.
9.Do you agree that customer-centricity and transparency are the buzzwords for
success in this evolving industry?
Private
employees
Govt.
employees Businessman
YES 18 20 19
NO 2 0 1
0
5
10
15
20
YES NO
Private
employeesGovt. employees
Businessman
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From this above data, it is found the 18 out of 20 (54%) from Pvt. Sector and 20out of 20 (60%) from Govt. Sector 19 out of 20 (57%) from Business men agree
with this statement whereas only 2 out of 20 (6%) from Pvt. Sector and 1 out of 20
(3%) from Business men do not agree with this statement.
0
5
10
15
20
YES NO
Private
employees
Govt. employees
Businessman
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MAJOR COMPETITIORS OF LIC
BAJAJ ALLIANZ
Bajaj Allianz Life Insurance is a union between Allianz SE, one of the largest
Insurance Company and Bajaj Finserv.
Allianz SE is a leading insurance conglomerate globally and one of the largest
asset managers in the world, managing assets worth over a Trillion (Over INR. 55,
00,000 Crores). Allianz SE has over 115 years of financial experience and is
present in over 70 countries around the world. At Bajaj Allianz Life Insurance,
customer delight is our guiding principle. Our business philosophy is to ensure
excellent insurance and investment solutions by offering customised products,
supported by the best technology.
Accelerated Growth
Fiscal Year No. of policies sold ew Business in FY
2001-2002(6 mths) 21,37 Rs. 7 cr.
2002-2003 1,15,965 Rs. 63.3 cr.
2003-2004 1,86,443 Rs. 180 cr.
2004-2005 2,88,189 Rs. 857 cr.
2005-2006 7,81,685 Rs. 2,717 cr.
2006-2007 20,79,217 Rs. 4,302 cr.
2007-2008 37,44,742 Rs. 6,674 cr.
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ICICI PRUDENTIAL
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank -
one of India's foremost financial services companies-and Prudentialplc - a leading
international financial services group headquartered in the United Kingdom. Total
capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of
74% and Prudential plc holding 26%.
We began our operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA). Today, our nation-wide
team comprises of 2074 branches (inclusive of 1,116 micro-offices), over 225,000
advisors; and 7 bancassurance partners.
ICICI Prudential is the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a
row, ICICI Prudential has been voted as India's Most Trusted Private Life Insurer,
by The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted
Brands'. As we grow our distribution, product range and customer base, we
continue to tirelessly uphold our commitment to deliver world-class financial
solutions to customers all over India.
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CHAPTER 9
RECOMMENDATIONS
In the modernized well advanced hi-tech approach to the customer every possible
facilities and effort to build up the confidence of the rising policy holders towards.
Insurance companies, to complete one another nothing is left to recommend. But
some recommendations that are intensely felt and highly required for insures to
sustain in the market.
These are as follows:
a) More and more transparency should be ascertained between insurers and
policy holders.
b) Particularly, in the emerging boom in the insurance company, every insurance
company should be customer centered, and well versed in the handling of
problem and grievances of the policy holders.
c) Each and Every product launched by the Insurance company should be in
favour of increasing need of policy holders.
IRDA should be more and more responsible to the insurance sector by determining
some standard. It should be mandatory to every insurers to make more and more
responsible and responsive to the policy holders so that comprehensive
understanding may be developed among policy holders. It may be beneficial on
both sides.
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CONCLUSION
The concept behind insurance is that a group of people exposed to similar risk
come together and make contributions towards formation of a pool of funds. In
case a person actually suffers a loss on account of such risk, he is compensated out
of the same pool of funds. Contribution to the pool is made by a group of people
sharing common risks and collected by the insurance companies in the form of
premiums.
LIC business spread out across the globe. To sustain itself it must promote its
products through advertising and improve its selling techniques. Customers mustbe aware of the new plans available at Aviva LIC. There is very tough competition
among the insurance companies. The entry of more insurance companies has
expanded the product segment to meet the different to the customers. LIC has vast
market and very firm grip on its traditional customers and monopoly of life
insurance products.
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BIBLIOGRAPHY
Yogkshem LIC Magazine
Outlook Express
Business today
Finance & Banking
WEBLIOGRAPHY
www.licindia.com www.indiainfoline.com www.iciciprulife.com www.hdfc.com
http://www.licindia.com/http://www.indiainfoline.com/http://www.icici.com/http://www.hdfc.com/http://www.hdfc.com/http://www.icici.com/http://www.indiainfoline.com/http://www.licindia.com/
