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A

PROJECT REPORT

ON

ANALYSIS OF FINANCIAL AND

PROFITABILITY RATIO OF

AVIVA LIFE INSURANCE

DDISSERTATIONISSERTATION

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FORFORTHETHE AAWARDWARDOFOFTHETHE DDEGREEEGREEOFOF BBACHELORACHELORSS IINNBUSINESSBUSINESS AADMINISTRATIONDMINISTRATION

SUBMITTED BY:-SUBMITTED BY:- SUBMITTED TO:-SUBMITTED TO:-

BHARATI VIDYAPEETH DEEMED UNIVERSITY

INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI

An ISO 9001:2008 Certified Institute

NAAC Accredited Grade A University

CRISIL Grading MBA Programme

A* - National Level

A**- State Level

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TABLE OF CONTENTS

Certificate

Acknowledgement

Preface

Executive Summary

CHAPTER -1: INTRODUCTION 1 -

27

Title

Objective of the Study

Scope of the Study Significance of the Industry

Significance of the Research

Research Technique

Sampling Methodology

Sampling unit

Sampling Area

Sample Size

Limitations

CHAPTER -2: RESEARCH METHODOLOGY 28 -

31

CHAPTER -3: FINANCIAL STATEMENTS OF AVIVA 32

CHAPTER-4: FACTS AND FINDINGS 33

CHAPTER-5: DATA AND INTERPRETATION 34 - 51

CONCLUSION & RECOMMENDATIONS 52 - 53

QUESTIONNAIRE 54 - 60

BIBLIOGRAPHY 61

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ACKNOWLEDGEMENT

First of fall I would like to thank the Management at Wall Street Finance Ltd .for

giving me the opportunity to do my 50 days project training in their esteemed

organization. I am highly obliged to Mr. Amit Arora (Relationship Manager) for

granting me to undertake my training at Jhandewalan branch.

I express my thanks to all Relationship Managers under whose able guidance and

direction, I was able to give shape to my training. Their constant review and excellent

suggestions throughout the project are highly commendable.My heartfelt thanks go to

all the executives who helped me gain knowledge about the actual working and the

processes involved in various departments

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PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated

debate for some years. The policy makers where in the catch 22 situation wherein for

one they wanted competition, development and growth of this insurance sector which

is extremely essential for channeling the investments in to the infrastructure sector. At

the other end the policy makers had the fears that the insurance premia, which are

substantial, would seep out of the country; and wanted to have a cautious approach of

opening for foreign participation in the sector.

As one of the rare occurrences the entire debate was put on the back burner and the

IRDA saw the day of the light thanks to the maturing polity emerging consensus

among factions of different political parties. Though some changes and some

restrictive clauses as regards to the foreign participation were included the IRDA has

opened the doors for the private entry into insurance.

Whether the insurer is old or new, private or public, expanding the market will present

multitude of challenges and opportunities. But the key issues, possible trends,

opportunities and challenges that insurance sector will have still remains under the

realms of the possibilities and speculation. What is the likely impact of opening up

Indias insurance sector?

The large scale of operations, public sector bureaucracies and cumbersome

procedures hampers nationalized insurers. Therefore, potential private entrants expect

to score in the areas of customer service, speed and flexibility. They point out that

their entry will mean better products and choice for the consumer. The critics counter

that the benefit will be slim, because new players will concentrate on affluent, urban

customers as foreign banks did until recently. This seems to be a logical strategy.

Start-up costs-such as those of setting up a conventional distribution network-are

large and high-end niches offer better returns. However, the middle-market segment

too has great potential. Since insurance is a volumes game. Therefore, private insurers

would be best served by a middle-market approach, targeting customer segments that

are currently untapped.

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EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the

maximum growth and potential as compared to the other sectors. Insurance has the

maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of

growth rate. This growth potential attracts me to enter in this sector and Wall Street

Finance Ltd being Corporate Agent of RELIANCE LIFE INSURANCE has given me

the opportunity to work and get experience in highly competitive and enhancing

sector.

The success story of good market share of different market organizations

depends upon the availability of the product and services near to the customer,

which can be distributed through a distribution channel. In Insurance sector,

distribution channel includes only agents or agency holders of the company. If

a company like RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have

adequate agents in the market they can capture big market as compared to the

other companies.

Agents are the only way for a company of Insurance sector through which

policies and benefits of the company can be explained to the customer .

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HISTORY OF INSURANCE IN INDIA

Ref: IRDA/GEN/06/2007

In India, insurance has a deep-rooted history. It finds mention in the writings of

Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ).

The writings talk in terms of pooling of resources that could be re-distributed in

times of calamities such as fire, floods, epidemics and famine. This was probably a

pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest

traces of insurance in the form of marine trade loans and carriers contracts.

Insurance in India has evolved over time heavily drawing from other countries,

England in particular.

1818 saw the advent of life insurance business in India with the establishment

of the Oriental Life Insurance Company in Calcutta. This Company however failed

in 1834. In 1829, the Madras Equitable had begun transacting life insurance business

in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and

in the last three decades of the nineteenth century, the Bombay Mutual (1871),

Oriental (1874) and Empire of India (1897) were started in the Bombay Residency.

This era, however, was dominated by foreign insurance offices which did good

business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and

London Globe Insurance and the Indian offices were up for hard competition from

the foreign companies.

In 1914, the Government of India started publishing returns of Insurance

Companies in India. The Indian Life Assurance Companies Act, 1912 was the first

statutory measure to regulate life business. In 1928, the Indian Insurance Companies

Act was enacted to enable the Government to collect statistical information about

both life and non-life business transacted in India by Indian and foreign insurers

including provident insurance societies. In 1938, with a view to protecting the

interest of the Insurance public, the earlier legislation was consolidated and amended

by the Insurance Act, 1938 with comprehensive provisions for effective control over

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the activities of insurers.

The Insurance Amendment Act of 1950 abolished Principal Agencies. However,

there were a large number of insurance companies and the level of competition was

high. There were also allegations of unfair trade practices. The Government of India,

therefore, decided to nationalize insurance business.

An Ordinance was issued on 19 th January, 1956 nationalising the Life Insurance

sector and Life Insurance Corporation came into existence in the same year. The LIC

absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245

Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the

Insurance sector was reopened to the private sector.

The history of general insurance dates back to the Industrial Revolution in the

west and the consequent growth of sea-faring trade and commerce in the 17th

century. It came to India as a legacy of British occupation. General Insurance in

India has its roots in the establishment of Triton Insurance Company Ltd., in the year

1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, wasset up. This was the first company to transact all classes of general insurance

business.

1957 saw the formation of the General Insurance Council, a wing of the Insurance

Associaton of India. The General Insurance Council framed a code of conduct for

ensuring fair conduct and sound business practices.

In 1968, the Insurance Act was amended to regulate investments and set minimum

solvency margins. The Tariff Advisory Committee was also set up then.

In 1972 with the passing of the General Insurance Business (Nationalisation) Act,

general insurance business was nationalized with effect from 1 st January, 1973. 107

insurers were amalgamated and grouped into four companies, namely National

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

Insurance Company Ltd and the United India Insurance Company Ltd. The General

Insurance Corporation of India was incorporated as a company in 1971 and it

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commence business on January 1sst 1973.

This millennium has seen insurance come a full circle in a journey extending to

nearly 200 years. The process of re-opening of the sector had begun in the early

1990s and the last decade and more has seen it been opened up substantially. In

1993, the Government set up a committee under the chairmanship of RN Malhotra,

former Governor of RBI, to propose recommendations for reforms in the insurance

sector.The objective was to complement the reforms initiated in the financial

sector. The committee submitted its report in 1994 wherein , among other things, it

recommended that the private sector be permitted to enter the insurance industry.

They stated that foreign companies be allowed to enter by floating Indiancompanies, preferably a joint venture with Indian partners.

Following the recommendations of the Malhotra Committee report, in 1999, the

Insurance Regulatory and Development Authority (IRDA) was constituted as an

autonomous body to regulate and develop the insurance industry. The IRDA was

incorporated as a statutory body in April, 2000. The key objectives of the IRDA

include promotion of competition so as to enhance customer satisfaction through

increased consumer choice and lower premiums, while ensuring the financial

security of the insurance market.

The IRDA opened up the market in August 2000 with the invitation for

application for registrations. Foreign companies were allowed ownership of up to

26%. The Authority has the power to frame regulations under Section 114A of the

Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging

from registration of companies for carrying on insurance business to protection of

policyholders interests.

In December, 2000, the subsidiaries of the General Insurance Corporation of India

were restructured as independent companies and at the same time GIC was

converted into a national re-insurer. Parliament passed a bill de-linking the four

subsidiaries from GIC in July, 2002.

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CHAPTER 1

INTRODUCTION TO THE INDUSTRY

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the

Oriental Life Insurance Company. First attempts at regulation of the industry were

made with the introduction of the Indian Life Assurance Companies Act in 1912. A

number of amendments to this Act were made until the Insurance Act was drawn up in

1938. Noteworthy features in the Act were the power given to the Government to

collect statistical information about the insured and the high level of protection the

Act gave to the public through regulation and control. When the Act was changed in

1950, this meant far reaching changes in the industry. The extra requirements included

a statutory requirement of a certain level of equity capital, a ceiling on share holdings

in such companies to prevent dominant control (to protect the public from any

adversarial policies from one single party), stricter control on investments and,

generally, much tighter control. In 1956, the market contained 154 Indian and 16

foreign life insurance companies. Business was heavily concentrated in urban areas

and targeted the higher echelons of society. Unethical practices adopted by some of

the players against the interests of the consumers then led the Indian government to

nationalize the industry. In September 1956, nationalization was completed, merging

all these companies into the so-called Life Insurance Corporation (LIC). It was felt

that nationalization has lent the industry fairness, solidity, growth and reach.

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Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to

regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to

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

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

objective of protecting the interests of the insuring public.

1956: The market contained 154 Indian and 16 foreign life insurance companies.

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MAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIAMAJOR PLAYERS IN THE INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to

spread the message of life insurance in the country and mobilise peoples savings for

nation-building activities. LIC with its central office in Mumbai and seven zonal

offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal,

operates through 100 divisional offices in important cities and 2,048 branch offices.

LIC has 5.59 lakh active agents spread over the country.

The Corporation 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. It has also entered into an agreement with the Sun Life

(UK) for marketing unit linked life insurance and pension policies in U.K.

In 1995-96, LIC had a total income from premium and investments of $ 5 Billion

while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's

income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent

growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US).

LIC has even provided insurance cover to five million people living below the

poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement

ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of

40 per cent. Compounded annual growth rate for Life insurance business has been

19.22 per cent per annum

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IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE

BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors in the dull

industry. The initiatives taken by the private players are very competitive and have

given immense competition to the on time monopoly of the market LIC. Since the

advent of the private players in the market the industry has seen new and innovative

steps taken by the players in this sector. The new players have improved the service

quality of the insurance. As a result LIC down the years have seen the declining phase

in its career. The market share was distributed among the private players. Though LIC

still holds the 75% of the insurance sector but the upcoming natures of these private

players are enough to give more competition to LIC in the near future. LIC market

share has decreased from 95% (2002-03) to 82 %( 2004-05).

1. HDFC Standard Life Insurance Company Ltd.

Established on 14th August 2000, HDFC Standard Life Insurance Co. Ltd. is a joint venture between

Housing Development Finance Corporation Limited (HDFC Limited) - India's leading housing finance

institution, and a Group Company of the Standard Life Plc, UK. The Company is one of leading private

insurance companies, offering a range of individual and group insurance solutions, in India. Being a

joint venture of top financial services groups, HDFC Standard Life has adequate financial expertise to

manage long-term investments safely and resourcefully.

HDFC Standard Life Insurance offers a range of individual and group solutions, which can be easily

personalized to specific needs. Its group solutions have been planned to offer complete flexibility,

together with a low charging structure. As of 31 December, 2008, the Company's new business

premium income stood at Rs. 1,839.70 Crores; it has covered over 812,811 lives so far. Given below is

a comprehensive list of policies and products on offer by HDFC Standard Life Insurance:

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2. Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture between Max India Limited, which

is a one of India's leading multi-business corporate, and New York Life International, which is a

Fortune 100 company & global expert in life insurance. Max New York Life Insurance started its

commercial operations in India in 2001. It is the first life insurance company in India to be awarded the

IS0 9001:2000 certification. The company has around 133 offices all over the country.

Max New York Life offers a variety of flexible products covering both life and health insurance

including 8 riders that can be customized to over 800 combinations which enable the customers to

choose the policy that suits their needs. Max New York Life also offers 6 products and 7 riders in group

insurance business. The company has a plan for every need, designed as to meet your long term

financial goals & aspirations.

3. ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, which is one of

India's foremost financial services companies, and Prudential plc, which is a leading international

financial services group headquartered in the United Kingdom. ICICI Prudential began the operationsin December 2000. Today, this company has over 2100 branches, which include 1,116 micro-offices,

over 290,000 advisors and 18 banc assurance partners.

ICICI Prudential Life Insurance Company is the first life insurer in India that received a National

Insurer Financial Strength rating of AAA (Ind) from Fitch ratings. ICICI Prudential has been voted as

India's Most Trusted Private Life Insurer for three consecutive years. ICICI Prudential Life Insurance

Company has various insurance plans that have been designed for different individuals, as every

individual has different insurance needs. Given below is a list of plans provided by ICICI Prudential

Life Insurance Company:

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4. .Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group, an Indian

multinational corporation, and Sun Life Financial Inc, a leading global insurance company. Birla Sun

Life Insurance is distinguished as the first company in the sector of financial solutions to begin

Business Continuity Plan. This insurance company has pioneered the unique Unit Linked Life

Insurance Solutions in India. Within 4 years of its launch, BSLI became one of the leading players in

the industry of Private Life Insurance Scheme.

Birla Sun Life Insurance believes in passion, integrity, speed, commitment and seamlessness. The

mission of the company is to help people with risk management. It also helps in managing the financial

situation of firms as well as individuals. Here is given a comprehensive list of policies and products

offered by Birla Sun Life Insurance Co. Ltd.

5 Tata AIG Life Insurance Company Ltd.

Tata AIG Life Insurance Company Limited, which is a joint venture between Tata Group and American

International Group, Inc. (AIG), offers a number of standard and custom-made life insurance policies.

Tata is one of the oldest and leading business groups of India. Tata Group has had a long associationwith India's insurance sector being the largest insurance company in India prior to the nationalisation.

American International Group, Inc (AIG) is the leading U.S. based international insurance and financial

services organization.

6 ING Vysya Life Insurance Company Private Limited

Established in India in September 2001, ING Vysya Life Insurance Company Limited is a joint venture

between Vysya Bank, which is one of the largest private sector banks in India, and ING Insurance Co.,

which is the world's second largest life insurance company. This private life insurance company has

around 140 branches all over India, with head office in Bangalore. ING Vysya Life Insurance Co. has

around 3000 employees with over 21,000 sales insurance agents and brokers. ING Vysya Life presently

has around 4.5 lakh customers, and is making a total income of Rs. 400 crore.

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ING Vysya Life Insurance gives you an opportunity to fulfill your responsibilities towards your family.

The ING Vysya Life protection plans provide financial security to your family in your absence. This

company also provides special policies, such as, Children's Plans; Retirement Plans; Investment Plans

and Savings Plans, which help you to secure your future financially. It also provides Life Insurance,

Medical Insurance, General Insurance, Long-Term Care Insurance, Group Insurance, Company

Insurance and Financial Services Insurance Products.

7 Bajaj Allianz Life Insurance Company Ltd.

Established in India in September 2001, ING Vysya Life Insurance Company Limited is a joint venture

between Vysya Bank, which is one of the largest private sector banks in India, and ING Insurance Co.,

which is the world's second largest life insurance company. This private life insurance company has

around 140 branches all over India, with head office in Bangalore. ING Vysya Life Insurance Co. has

around 3000 employees with over 21,000 sales insurance agents and brokers. ING Vysya Life presently

has around 4.5 lakh customers, and is making a total income of Rs. 400 crore.

ING Vysya Life Insurance gives you an opportunity to fulfill your responsibilities towards your family.

The ING Vysya Life protection plans provide financial security to your family in your absence. This

company also provides special policies, such as, Children's Plans; Retirement Plans; Investment Plans

and Savings Plans, which help you to secure your future financially. It also provides Life Insurance,

Medical Insurance, General Insurance, Long-Term Care Insurance, Group Insurance, Company

Insurance and Financial Services Insurance Products.

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8 Metlife India Insurance Company Pvt. Ltd.

MetLife India Insurance Co. Pvt. Ltd is a joint venture between MetLife Group and its Indian partners,

including J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities,

Way2Wealth, and Mini Muthoothu. MetLife is insuring the lives of the people for around 140 years.

MetLife is 88 of the top one-hundred FORTUNE 500 companies. MetLife entered Indian insurance

sector in 2001.

MetLife was the first insurance company which established a financial holding company with a

nationally chartered bank. In 2005, Working Mother Magazine honored MetLife Insurance Co. as one

of the "100 Best Companies for Working Mothers". In 2005, the company was listed among the Top 50

Companies for Diversity. In 2006, MetLife was named to the National Association for Female

Executives' annual list of Top 30 Companies for Executive Women. Today, when people are feeling a

greater financial burden than ever before, MetLife is helping millions of its customers in creating their

own personal safety net by taking insurance plans. The plans provided by MetLife Insurance are listed

below:

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Marketing of Insurance In India

Insurance is in a manner of speaking the last frontier in the financial sector to open. It

is also a sector, which leads to benefits across the full spectrum, from the individual

who now have wider choices, to the economy, which see increased savings, to the

infrastructure sector, which can look forward to long term funding being available. In

an under-insured economy, newer channels of distribution have to be utilized to

intensify the reach of insurance both in urban and rural markets. This will create huge

employment opportunities not only within insurance companies but also as agents and

consultants of insurance companies.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the

Marketing Mix is different. However, there are certain common characteristics that

one can cull out from the possible strategies that companies adopt.

Product:

The development of flexible products to suit individual requirements is what will

differentiate the winners from the also-rans. The key to success is in providing

insurance solutions, not standardized insurance products. The concept of

riders/optional benefits has already been a huge innovation brought about by the new

players, which has led to customization of products for individual needs. However,

companies may differentiate themselves on the basis of product segments that they

choose to focus on and excel in.

Place:

Different companies may however choose different channels and different

geographies to focus on. The channel options are - tied agency force, corporate agents

and brokers and this is an area where different companies will make different choices.

Many companies like HDFC Standard Life are focusing on all channels whereas

companies like Max New York Life are focusing on the tied agency force only.

Customer interface will be a key challenge for life insurance companies and includes

every that interaction that the customer has with the company, such as sales, newbusiness underwriting, policy servicing, premium payments, claim processing and so

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on. Technology can play a crucial role in delivering the highest standards of service

set by the company and it will be imperative for any serious player to excel in all of

these.

Price:

Price is a relevant differentiator only in two segments - pure term insurance and in

pure annuities. Here too, service delivery and financial strength will need to be

present at a minimum acceptable level for price to be a relevant differentiator. In case

of savings oriented products, long-term returns generated are more relevant than just

the price of the product. A focus on generating good investment performance and

keeping a tight control on costs help in generating good long-term maturity value for

customers. Norms have been laid down on all of these by IRDA and adhering to these

while delivering good returns will be a challenge.

Promotion and Advertising:

The level of demand is latent and will have to be activated considerably. The market

needs to be developed. Greater awareness of insurance and the need to have it as a

protection tool rather than as a tax planning measure needs to be appreciated by the

Indian people. Various communication tools including advertising, direct marketing

and road shows contribute to all this and different companies take different

approaches on these.

Process:

Cashless settlement: One of the most defining and customer-friendly changes that

weve seen in recent years relates to the way claims settlements are made. The advent

of the third-party administrator (TPA) regime has facilitated the transition to the

hugely convenient era of cashless settlement of health and auto insurance claims.

TPAs are entities who process claims on behalf of insurers: the IRDA licenses them

after it is satisfied that they have the financial strength, the trained manpower, the

infrastructure and the skills to undertake this activity.

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Likewise, with auto insurance, the TPA ties up with garages and authorized service

centers for cashless settlement of auto insurance claims.

Lower premiums: The spirit of competition and the broadening of the risk

experience of insurance companies have contributed to a fall in premiums over the

years. Thats because, other things being equal, an insurer who covers the lives just of

10 people bears a higher risk than an insurer who covers the lives of, say, 100 people.

Further, a broader base will provide greater efficiencies on costs such as distribution,

management and claims. A broad basing of the mortality experience, therefore, gives

insurers the elbowroom to compete by lowering premiums, and that trend is expected

to continue.

Premium payment flexibility: Insurers have imparted certain flexibility to premium

payment options in order to address this concern. For instance, one now have the

option to pay your premiums upfront, which is then carried forward for the tenure of

the policy. The yearly premiums are drawn from the initial corpus. Insurers have also

introduced the concept of automatic cover maintenance to protect your policy from

lapsing owing to your omission to pay your premium on time. Under this, in the event

of your not paying the premium, the insurer dips into your investment account to the

extent of the premium. Of course, this comes with an in-built drawback: your

investment portion diminishes year on year to the extent of the amount paid to cover

your risk.

Physical Evidence:

This can play a significant role for marketing in the Indian scenario. Since Internet

users are comparatively lesser than countries such as US, the offline mode will be

preferred in India. Although the distribution model is largely agent-based, wherever

the customer is in contact with the company, this factor can play a significant role in

luring the customer.

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People:

The most important factor that materializes sales and maintains customer

relationships on a long-term basis is this factor. No matter what distribution

strategy a company adopts, customer relationship has to be taken care of in order

to maintain the customer base on a long-term basis.

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SWOT ANALYSIS

The SWOT analysis of Insurance sector is as follows:-

1. Strength-Very good policies of life coverage.2. Weaknesses:-unable to convince the people about the products. There are not

much advisors for the insurance companies.3. Opportunities:-Untapped rural sector and small towns.4. Threats:-growing competition from larger MNC's.

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INTRODUCTION TO THE COMPANY

Aviva Life Insurance India is a private insurance company formed from acollaboration between the Aviva insurance group of UK and the Dabur group, one of

India's oldest and top producer of traditional health care products . Aviva's products

are meant to provide customers flexibility, transparency and value for money.

Bancassurance in India

Aviva is also accredited to the introduction of Bancassurance in India. Aviva has

Bancassurance tie ups with the leading Banks in India including ABN AMRO Bank,American Express Bank, IndusInd Bank, Centurion Bank of Punjab, The Lakshmi

Vilas Bank Ltd. and Punjab & Sind Bank, Co-operative Banks in Gujarat, Rajasthan,

Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and Maharashtra and

regional Banks.

HISTORY

Aviva insurance group in UK with a history dating back to 1696, today stands as one

of the leading provider of life and pension products to Europe and other parts of the

world. The history of Aviva Life Insurance India starts at 1834 during nationalization

when Aviva was the largest foreign insurance group in terms of the compensation paid

by the Indian Government. In 1995 Aviva was the first foreign insurance company to

start its representative office in India. At present in Aviva Life Insurance India, the

Aviva group is a 26% share holder and the Dabur group holds 74% shares in the joint

venture.

Programme highlights of today

Aviva Life Insurance India has 40 Branches in India, including rural branches

supporting its distribution network. With over 27,000 Financial Planning

Advisers (FPAs) and the Financial Health Check (FHC) programme it has

been successful in setting up its position in the Indian market. The FHC is a

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free service administered by the FPAs which analyses the customer's long-

term savings and insurance needs and depending on the life stage and earnings

of the customer it selects the proper insurance product for them.

Aviva Life Insurance India initiated the concept of Bancassurance in India and

at present it has Bancassurance tie-ups with ABN Amro Bank, American

Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas

Bank Ltd. and Punjab & Sind Bank, 11 Co-operative Banks in Gujarat,

Rajasthan, Jammu & Kashmir, Bihar, West Bengal, Andhra Pradesh and

Maharashtra and one regional Bank in Sikkim. This has helped to distribute

Aviva products in nearly 378 towns and cities across India.

Aviva Life Insurance India offers more modern Unit Linked and Unitized With

Profit money products to the customers. Following the IRDA guidelines, with

effect from 1 July 2006, these unit - linked products have been modified.

The products of Aviva insurance group of India are:

LifeLong

LifeSaver or EasyLife Plus

Young Achiever

LifeBond and LifeBond Plus

PensionPlus

LifeShield

Freedom LifePlan

LifeBond

The fund management operations of Aviva Life Insurance India is controlled

from Mumbai and the fund options includes Unitized With-Profits Fund and

four Unit Linked funds:

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Protector Fund - The fund comprises of debt securities in the range of 60-

100%, equities in the range of 0-20% and money market and cash in the range

of 0-20%.

Secure Fund - The fund comprises of debt securities in the range of 50-100%,

equities in the range of 0-20% and money market and cash in the range of 0-

20%.

Balanced Fund - The fund comprises of debt securities in the range of 50-


of 0-10%.

Growth Fund - The fund will comprise of debt securities in the range of 0-


of 0-20%.

These funds provide investment security to the capital of the customers.

Through their association with Basix (a micro financial institution) and other NGOs,Aviva Life Insurance India have been able to reach out to those underprivileged who

had no access to insurances till day.

In Aviva Life Insurance India , thus , by combining protection and long term savings

the customers can safeguard and provide life products for their family with their

changing needs.

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Aviva Life Insurance Products

Whole Life

o Life long

Endowment:

o LifeSaver

o EasyLife Plus

o LifeSaver Plus

Child Policy

o Young Achiever

o SaveGuard Junior

o Aviva Little Master

Single Premium

o LifeBond

o LifeBond Plus

Pension Policies:

o Pension Plus

Term

o LifeShield

o Freedom LifePlan (fixed term protection plan)

o LifeBond 5 (a tax efficient & limited premium payment term investment plan)

Aviva has 176 branches in rural and urban cities included. The Aviva Bancassurance

collaborations offer 500 towns and cities connectivity.

Some special services by Aviva that deserve mention are:

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Aviva's Fund Management Service:

Aviva provides unitized with-profits fund and four unit-linked funds that are Protector

Fund, Secure Fund, Balanced Fund and Growth Fund.

Social Service:

Aviva, in association with Basix - a micro financial institution, works towards

providing insurance facilities to the underprivileged.

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Insurance Companies in India

Top Insurance Companies

Life Insurance Companies

Home Insurance Companies

GIC

AMP Sanmar

Bajaj Allianz

Bharti AXA

Birla Sun Life

Canara HSBC OBC

Citibank Travel Insurance

Citifinancial Auto InsuranceGE Money

HDFC Life Insurance

ICICI Insurance Co.

ICICI Insurance Schemes

ICICI Prudential

ICICI Lombard

ICICI Life Insurance

ING VysyaKotak Mahindra

Max New York

Metlife

Reliance General Insurance

Reliance Life

Reliance Standard Life

Reliance Standard Insurance

Royal Sundaram

Sahara Life

SBI Life

Shriram Life

Tata AIG

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CORPORATE OBJECTIVE

At Aviva Life Insurance, we strongly believe that as life is different at every stage, life

insurance must offer flexibility and choice to go with that stage. We are fully prepared

and committed to guide you on insurance products and services through our well-

trained advisors, backed by competent marketing and customer services, in the best

possible way.

It is our aim to become one of the top private life insurance companies in

India and to become a cornerstone of ALI integrated financial services

business in India.

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CORPORATE MISSION

To set the standard in helping our customers manage their financial future.

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY AVIVA LIFE

INSURANCE

INSURANCE PLANS AVAILABLE

ABOUT AVIVA

Aviva Life Insurance Company Limited offers you Products that fulfill your savingsand protection needs.Our aim is to emerge as a transational Life Insurer of global

scale angd standard.

Aviva Life Insurance Company Limited is a group company of Aviva Capital

Limited, a part of Aviva -Anil Dhirubhai Ambani Group.Aviva Capital is one of

India's leading private sector financial services companies.Aviva Capiital has

interests in assets managements and mutual funds,stock brocking,life and general

insurance and other activities of financial services.

The Premiums paid inUnit linked Life Insurance policies are subject to investment

risks associated with capital markets and net asset values of the units may go up or

down based on the performance of fund and factors influencing the capital market and

the insured is responsible for his/her decisions.

Tax laws are subject to changes with retrospective effect and consulting a tax expert

for an opinionis recommended.

Why do I need Protection Plans?

Protection Plans help you shield your family from uncertainties in life due to financial

losses in terms of loss of income that may dawn upon them incase of your untimely

demise or critical illness. Securing the future of ones family is one of the most

important goals of life. Protection Plans go a long way in ensuring your familys

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financial independence in the event of your unfortunate demise or critical illness.

They are all the more important if you are the chief wage earner in your family. No

matter how much you have saved or invested over the years, sudden eventualities,

such as death or critical illness, always tend to affect your family financially apart

from the huge emotional loss.

1Protection Plans

In todays uncertain world, there could be calamity at every step of the life. It is up to

you to ensure that your family stays protected always.

Aviva Protection Plans helps you do exactly the same. You have a wide range of

options to choose a plan from. Right from limited period plans to lifetime protection

plans, you can opt for the one that suits your lifestyle.

While we understand that nothing can compensate for the loss of a life, we intend to

provide you the peace of mind. Investing in Aviva Protection Plans would mean your

familys future is in safe hands.

Type of Protection Plans

Aviva Term Plan

Aviva Term Plan is a pure life insurance Plan that offers you comprehensive and

affordable coverage for a limited period of time to suit your needs.

Key Features

Get higher insurance protection at economical rates

Optional Accidental and Disablement Rider to enhance protection

Economical way to protect your family against financial liabilities Like loss of

income and outstanding loans etc

Discount on premium rates for women

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Suitable for business owners who want to cover the life of their key employees

Aviva Special Term Plan is a pure life insurance plan that offers you comprehensive

and affordable coverage for a limited period

of time to suit your needs.

Key Features

Get higher insurance protection at economical rates

Basic premiums paid will be refunded at maturity

Choose to pay Regular or Single Premium

Discount on premium rates for women

Choose to add the Benefits of two riders to your Policy-Critical Illness and Accidental

Death Benefit and Total and Permanent Disablement Rider

Aviva Endowment Plan gives you just the financial independence to realise your

dreams in the future. It lets you decide how much you would like to set as your Sum

Assured based on your current financial position and your expected future expenses.

Key Features

On maturity receive Sum Assured plus bonuses

Wealth creation through bonus additions

More Value for your money by way of High Sum Assured Rebate

Choose to add the Benefit of three Riders-Aviva Term Life Insurance Benefit Rider,

Aviva Critical Conditions Rider and Aviva Accidental Death and Total and Permanent

Disablement Rider

Choose to avail of Policy Loan after three years

Why do I need Savings & Investment Plans?

You have always given your family the very best. And there is no reason why they

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shouldnt get the very best in the future too. As a judicious family man, your priority

is to secure the well-being of those who depend on you. Not just for today, but also in

the long term. More importantly, you have to ensure that your familys future

expenses are taken care, even if something unfortunate were to happen to you

2 Saving &Investment Plans

Aviva Super Automatic Investment Plan is an enhanced Unit Linked plan addressing

comprehensive needs to strike that perfect balance of Protection and Savings with full

flexibility as you grow in your career. Aviva Super Automatic Investment Plan gives

you full flexibility to choose just the right investment mix to reap higher benefits.

Key Features Aviva Super Automatic Invest Plan

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Two plan options to choose from Ready-made & Tailor-made.

Life Stage asset allocation to ensure automatic change in investment patterns - under

Ready-made Plan option. Freedom to decide your own fund mix based on your risk

profile under Tailor-made Plan Allows Systematic transfer plan to average out the cost

of unit purchases in equity.

Regular, limited, single premium paying options Unmatched flexibility through our

Exchange Option to move between Aviva suite of unit linked products Liquidity in

the form of partial withdrawal. Option to package policy with Aviva Major Surgical

Benefit Rider, Aviva Critical Conditions (25) Rider, Aviva Term Life Insurance

Benefit Rider, Aviva Accidental Death and Total and Permanent Disablement Rider

With Aviva Super Market Return plan you can have the twin advantage of insurance

protection as well as reaping the benefits of investment growth. It is a flexible plan

which works all through your life and meets the changing requirements like additional

protection, liquidity through cash, option to invest in different asset class, steady

golden years and many more.

Key Features Aviva Super Market Return Plan:

Twin benefit of market linked return and insurance protection. A Unit Linked Plan,

different form traditional Life Insurance products, with maximum maturity age of 80

years Option to create your own portfolio depending on your risk appetite Choose

form eight different investment funds Flexibility to switch between funds Option to

pay regular as well as single premium & Top-ups Option to package policy with

Aviva Major Surgical Benefit Rider, Aviva Critical Conditions (25) Rider, Aviva Term

Life Insurance Benefit Rider, Aviva Accidental Death and Total and Permanent

Disablement Rider Liquidity through partial withdrawals the Aviva Money Guarantee

Plan is Unit Linked product addressing comprehensive need to strike that perfect

balance of Protection and Savings, that you deserve as you grow successfully. The

Aviva Money Guarantee Plan is a Regular Premium Unit Linked Policy which

guarantees the entire premium (including premiums for top-ups) paid by you. This is a

plan which helps you reap all the benefits of a rising market simultaneously protecting

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you from the downside risk of the market.

Key Features

Capital Guarantee: The sum of all premiums paid is guaranteed on maturity or on

death before the maturity.

Capital Guarantee is available on both the basic premiums as well as on top-up

premiums

Unique Return Shield feature to protect your returns

Choice to invest from 3 pre-packaged investment fund options

Unmatched flexibility through our Exchange Option to move between the Aviva Life

Insurance Unit Linked products offered, as you grow up the ladder

Liquidity in the form of partial withdrawals from top-up fund

Option to package with Accidental Death & Disability and Term Insurance riders

Why do I need Retirement Plans?

Retirement Plans provide you with financial security so that when your professional

income starts to ebb, you can still live with pride without compromising on your

living standards. By providing you a tool to accumulate and invest your savings, these

plans give you a lump sum on retirement, which is then used to get regular income

through an annuity plan. Given the high cost of living and rising inflation, employer

pensions alone are not sufficient. Pension planning has therefore become critical

today.

Indias average life expectancy is slated to increase to over 75 years by 2050 from the

present level of close to 65 years. Life spans have been increasing due to better health

and sanitation conditions in the country. However, the average number of years of

employment has not been rising commensurately. The result is an increase in the

number of post-retirement years.

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3 Retirement Plans

Aviva Wealth + Health Plan, a health insurance plan underwritten by Aviva Life

Insurance Company Limited, is designed to work in conjunction with contributions

towards savings. The uniqueness of this plan is that it not only provides benefits for

covered injuries but also for other injuries by encashment from the unit fund. This

plan from Aviva Life offers the Hospitalization and Surgical Benefits and also covers

Critical Illnesses. In short this plan provides you with a personalised quality health

cover that fits your lifestyle.

Key Feature

A Unit Linked plan with Unique Savings Component

Twin benefit of market linked return and health protection

Choose from two different plan options

Flexibility to take care of your familys health

Option to pay Top-ups

Option to package with multiple riders

Liquidity through partial withdrawals

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UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT

PORTFOLIO IS BORNE BY THE POLICYHOLDER.

Retirement means different things to different people, while some want to relax and

take a trip around the world, some want to start up a venture of their own, and pursue

a dream harnessed for years. The power to make your autumn years special lies only

with you. The Aviva Super Golden Years Plan gives you the power and the right kind

of solution - A retirement plan that allows you to save systematically and generate the

much-needed corpus to make your olden years look golden.

Key Features Aviva Super Golden Years Plan:

Invest systematically and secure your golden years

A flexible unit-linked pension product that is different from traditional life insurance

products with Vesting Age between 45 & 70 years

Eight different investment funds to choose from

Flexibility to switch between funds

Option to pay Regular, Single as well as Top-up premiums

Flexibility to advance / extend your Vesting Age

Aviva Life Insurance Company Limited promises to bring to you with its Total

Investment Plan Series II Pension. To know more, read further

We value your dreams in this journey of life. Aviva Total Investment Plan Series- II

Pension (TIPS-II Pension) are the eyes to let you see them becoming reality.

Your need for investment keeps changing at different stages of life. We promise to

walk through every need with you in the span spent with us and ever beyond that and

so on

Whether it is start of your career, your marriage, birth of child, education of children,

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their marriage, your old age requirements everywhere you would find Aviva Total

Investment Plan Series II- Pension assisting you financially and thereby providing

relief mentally too in totality.

Utilize our multifarious flexibility options at par as per your convenience.

As you progress on this ladder of life we provide you the platform to increase your

investment component. With the Aviva TIPS- II Pension you can meet all your

financial needs, without the complexity of managing multiple products.

Key Features

This is a Single premium unit linked pension plan with options to purchase the same

plan with reduced allocation charges in subsequent policy years. Since more premium

is allocated towards investment due to lower allocation charges on subsequent

purchases greater would be the returns. Purchasing the same plan in the subsequent

years is an option.

1st purchase would be called as Classic

2nd purchase would be called as Silver

3rd purchase would be called as Gold

4th purchase would be called as Diamond

5th purchase would be called as Platinum

Once the client purchases the first policy there will full flexibility for the client as to

when second and subsequent purchase can be made and how much premium should

be paid for each purchase subject to the following -

1 The minimum premium on each purchase should be at least Rs. 25,000.

2 The maturity date on each purchase cannot exceed 70 years

3 All the polices should mature on maturity date of the first purchase.

4 The term of the polices purchased during second, third, fourth and fifth policy years

will be 9, 8, 7 and 6 respectively.

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5 New policy can be purchased only if all the previous polices are in force on the date

of purchase of new policy.

Why do I need Child Plans?

Child Plans helps you save so that you can fulfill your childs dreams and aspirations.

These plans go a long way in securing your childs future by financing the key

milestones in their lives even if you are no longer around to oversee them. As a

parent, you wish to provide your child with the very best that life offers, the best

possible education, marriage and life style.

Most of these goals have a price tag attached and unless you plan your finances

carefully, you may not be able to provide the required economic support to your child

when you need it the most. For example, with the high and rising costs of education,

if you are not financially prepared, your child may miss an opportunity of a lifetime.

4 Child Plans

Aviva Child Plan

Aviva Child Plan helps you save systematically so that you can give your child the

much-needed financial security in the future. Simply put, Aviva Child Plan gives you

the freedom to enjoy every moment with your child today, without worrying about

his/her tomorrow.

Key Features

Risk protection for you during the term of the Policy

Accumulated bonus at the end of the Policy Term

25% of Sum Assured payable every year as lump sum Benefit during the last four

Policy Anniversaries

All future premiums are waived in the event of unfortunate loss of life

Guaranteed Fixed Benefits continue even after loss of life of the Policy holder

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Method Adopting of Data CollectionThere are two types of data collection technique. i.e. Primary Data and Secondary Data.

In my research project there is no need to collect primary data. I want only secondarydata that I have been collected by different sources.Internet- From the internet we have take the histories of companies for theintroduction

part. We search some data from the website of company and search engine likeGoogle.Books- Books are also helpful us for the data research. We have taken help of bookstocalculate the ratios and analyzing the financial statements like Profit & Loss accountand

Balance sheet etc

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KEY FINDINGS OF FINANCIAL ANALYSIS OF EXISTING BUSINESS

1 Financial Data

A synopsis of the financial position / performance (based on analysis of the

books of accounts provided to us by the client) is placed below.

(Amt. in Rs. Lakhs)

PARTICULARS 2005-06 2006-07 2007-08

Sales & Direct Income 695.35 547.01 540.14

Net Purchases 676.84 531.75 497.37

Cost of Goods Sold 672.49 525.40 499.30

Gross Profit 22.86 21.62 40.84

Indirect Income 1.92 0.00 0.00

Net Profit 3.05 2.31 2.66

Opening Stock 17.51 26.03 36.06

Closing Stock 26.03 36.06 39.20

Average Stock 21.77 31.04 37.63

Current Assets 123.34 136.89 109.62

Quick Assets 87.16 90.25 65.79

Other Current Liabilities 48.70 77.57 55.31

Working Capital Limit 39.66 34.97 39.94

External Liabilities 131.15 153.69 128.28

Own Funds 10.15 9.33 5.75

Long Term Debt Funds 7.13 3.48 1.20

Unsecured Debt Funds 35.66 37.67 31.82

Total Funds 141.30 163.02 134.02

Total Assets 141.30 163.02 134.02

Net Working Capital 34.98 24.35 14.37

Capital Employed 92.60 85.45 78.72

Debt/Owners Fund 4.21 4.41 5.75

Net Worth / Total Assets (%) 7.19 5.72 4.29

Total Assets / External Liabilities 1.08 1.06 1.04Inventory Holding Period (in days) 12 22 28

Avg. Debtors Collection Period (in days)* **** 44 46

Avg. Payment Period (in days)* **** 41 46

* Average debtors collection period and average payment period for the financial year

2005-06 are not shown as the opening balances of debtors and creditors were not

available.

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2 Comparative Common Size Statement

Balance Sheet (As a % of Total Funds)

PARTICULARS 2005-06 2006-07 2007-08

Owners Fund 7.19 5.72 4.29

Secured Long Term Debt 5.04 2.14 0.90

Unsecured Long Term Debt 25.23 23.11 23.75

Current Liabilities 62.54 69.03 71.07

TOTAL 100.00 100.00 100.00

Fixed Assets 12.71 16.03 18.21

Current Assets 87.29 83.97 81.79

TOTAL 100.00 100.00 100.00

The comparative common size statement of the Balance Sheet expresses the items of

the Balance Sheet as a percentage of total funds. The analysis of the above table

reveals the following :

1. Both in rupee terms as well as percentage term, the net-worth/own funds of the

unit have shown a decreasing trend in the financial years under study. The

proportion of current liabilities has shown an increasing trend. It may be

mentioned that the long term sources of funds were more than the long term

uses in all the FYs under study and debt-owners fund ratio was on the higher

side.

2. The major component of assets was comprised of current assets. The current

assets have shown a decreasing trend and fixed assets have shown an

increasing trend.

Income Statement (As a Percentage of Sales & Direct Income)

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PARTICULARS 2005-06 2006-07 2007-08

SALES & DIRECT INCOME 100 100 100

Cost of Goods Sold 96.71 96.05 92.44

Gross Profit 3.29 3.95 7.56

Operating Expenses 1.94 1.94 4.63

Operating Profit 1.35 2.01 2.93

Non Operating Expenses (Other than Interest) 0.18 0.21 0.21

Indirect Income 0.28 0.00 0.00

EBIT 1.44 1.80 2.72

Interest 1.00 1.38 2.23

PBT 0.44 0.42 0.49

Tax 0.00 0.00 0.00

PAT 0.44 0.42 0.49

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CHAPTER 2

RESEARCH

METHODOLOGY

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All the findings and conclusions obtained are based on the survey done in the working

area within the time limit. I tried to select the sample representative of the whole

group during my job training. I have collected data from people linked with different

profession at Delhi.

RESEARCH PLAN:

Preliminary Investigation:

In which data on the situation surrounding the problems shall be gathered to arrive at

The correct definition of the problem.

An understanding of its environment.

Exploratory Study:

To determine the approximate area where the problem lies.

RESEARCH DESIGN:

Research was initiated by examining the secondary data to gain insight into the

problem. By analyzing the secondary data, the study aim is to explore the short

comings of the present system and primary data will help to validate the analysis of

secondary data besides on unrevealing the areas which calls for improvement.

DEVELOPING THE RESEARCH PLAN:

The data for this research project has been collected through self Administration. Due

to time limitation and other constraints direct personal interview method is used. A

structured questionnaire was framed as it is less time consuming, generates specific

and to the point information, easier to tabulate and interpret. Moreover respondents

prefer to give direct answers. In questionnaires open ended and closed ended, both the

types of questions has been used.

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COLLECTION OF DATA:

1: Secondary Data: It was collected from internal sources. The secondary data was

collected on the basis of organizational file, official records, news papers, magazines,

management books, preserved information in the companys database and website of

the company.

2: Primary data: All the people from different profession were personally visited and

interviewed. They were the main source of Primary data. The method of collection of

primary data was direct personal interview through a structured questionnaire.

SAMPLING PLAN:

Since it is not possible to study whole universe, it becomes necessary to take sample

from the universe to know about its characteristics.

Sampling Units: Different professionals Chartered Accountants, Tax

Consultants, Lawyers, Business Man, Professionals and House Wives of

Delhi.

Sample Technique: Random Sampling.

Research Instrument: Structured Questionnaire.

Contact Method: Personal Interview.

SAMPLE SIZE:

My sample size for this project was 200 respondents. Since it was not possible to

cover the whole universe in the available time period, it was necessary for me to take

a sample size of 200 respondents.

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DATA COLLECTION INSTRUMENT DEVELOPMENT:

The mode of collection of data will be based on Survey Method and Field Activity.

Primary data collection will base on personal interview. I have prepared the

questionnaire according to the necessity of the data to be collected.

RESEARCH LIMITATIONS:

It was not possible to understand thoroughly about the different marketing

aspects of the Financial Consultant within 60 days.

As stipend, money was not given it was difficult to continue the project work.

All the work was limited in some limited areas of Delhi so the findings should

not be generalized.

The area of research was Delhi and it was too vast an area to cover within 60

days.

Objectives of the study:

To get an empirical view of the Aviva.

To study the procedure of customer complaints in Aviva.

To get an insight of all the competitors.

To study the various products offered.

To study the customers preference and perception regarding Aviva.

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CHAPTER 3

CONCEPTUAL

DISCUSSION

LITRATURE REVIEW

Insurance Market- Present:

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The insurance sector was opened up for private participation four years ago. For years

now, the private players are active in the liberalized environment. The insurance

market have witnessed dynamic changes which includes presence of a fairly large

number of insurers both life and non-life segment. Most of the private insurance

companies have formed joint venture partnering well recognized foreign players

across the globe.

There are now 29 insurance companies operating in the Indian market 14 private life

insurers, nine private non-life insurers and six public sector companies. With many

more joint ventures in the offing, the insurance industry in India today stands at a

crossroads as competition intensifies and companies prepare survival strategies in

scenario.

There is pressure from both within the country and outside on the Government to

increase the Foreign Direct Investment (FDI) limit from the current 26% to 49%,

which would help JV partners to bring in funds for expansion.

There are opportunities in the pensions sector where regulations are being framed.

Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issued

the first license for a standalone health company in the country as many more players

wait to enter. The health insurance sector has tremendous growth potential, and as it

matures and new players enter, product innovation and enhancement will increase.

The deepening of the health database over time will also allow players to develop and

price products for larger segments of society.

State Insurers Continue To Dominate There may be room for many more

players in a large underinsured market like India with a population of over one billion.

But the reality is that the intense competition in the last five years has made it difficult

for new entrants to keep pace with the leaders and thereby failing to make any impact

in the market.

13

Also as the private sector controls over 26.18% of the life insurance market and over

26.53% of the non-life market, the public sector companies still call the shots.

The countrys largest life insurer, Life Insurance Corporation of India (LIC), had a

share

of 74.82% in new business premium income in November 2005.

Similarly, the four public-sector non-life insurers New India Assurance, National

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Insurance, Oriental Insurance and United India Insurance had a combined market

share of 73.47% as of October 2005. ICICI Prudential Life Insurance Company

continues to lead the private sector with a 7.26% market share in terms of fresh

premium, whereas ICICI Lombard General Insurance Company is the leader among

the private non-life players with a 8.11% market share. ICICI Lombard has focused

on growing the market for general insurance products and increasing penetration

within existing customers through product innovation and distribution.

Reaching Out To Customers No doubt, the customer profile in the insurance

industry is changing with the introduction of large number of divergent intermediaries

such as brokers, corporate agents, and bancassurance.

The industry now deals with customers who know what they want and when, and are

more demanding in terms of better service and speedier responses. With the industry

all set to move to a detariffed regime by 2007, there will be considerable

improvement in customer service levels, product innovation and newer standards of

underwriting.

Intense Competition In a de-tariffed environment, competition will manifest itself

in prices, products, underwriting criteria, innovative sales methods and

creditworthiness. Insurance companies will vie with each other to capture market

share through better pricing and client segmentation.

The battle has so far been fought in the big urban cities, but in the next few years,

increased competition will drive insurers to rural and semi-urban markets.

14

Global Standards While the world is eyeing India for growth and expansion, Indian

companies are becoming increasingly world class. Take the case of LIC, which has set

its sight on becoming a major global player following a Rs280-crore investment from

the Indian government. The company now operates in Mauritius, Fiji, the UK, Sri

Lanka, and Nepal and will soon start operations in Saudi Arabia. It also plans to

venture into the African and Asia-Pacific regions in 2006.

The year 2005 was a testing phase for the general insurance industry with a series of

catastrophes hitting the Indian sub-continent.

However, with robust reinsurance programs in place, insurers have successfully

managed to tide over the crisis without any adverse impact on their balance sheets.

With life insurance premiums being just 2.5% of GDP and general insurance

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premiums being 0.65% of GDP, the opportunities in the Indian market place is

immense. The next five years will be challenging but those that can build scale and

market share will survive and prosper.

(G)

Share capital

Equity instruments

An equity instrument is a contract that evidences a residual interest in the assets of an

entity after deducting all its liabilities. Accordingly, a financial instrument is treated as

equity if:I.

There is no contractual obligation to deliver cash or other financial assets or to

exchange financial assets or liabilities on terms that may be unfavorable; and

II.

The instrument is a non-derivative that contains no contractual obligation to

deliver a variable number of shares, or is a derivative that will be settled only by the

Company exchanging a fixed amount of cash or other assets for a fixed number of theCompanys own equity instruments.

Dividends

Dividends on ordinary shares are recognized in equity in the period in which they are

paid and, for the final dividend, approved by shareholders. Dividends on preference

shares are recognized in the period in which they are declared and appropriately

approved.

37

Research Methodology

Market research is the process of systematic gathering, recording and analyzing of

data about customers, competitors and the market. Marketing research (also called

consumer research) is a form of business research. It is a form of applied sociology

which concentrates on understanding the behaviors, whims and preferences, of

consumers in a market-based economy. Market research can help create a business

plan, launch a new product or service, fine tune existing products and services,

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expand into new markets etc. It can be used to determine which portion of the

population will purchase the product/service, based on variables like age, gender,

location and income level. It can be found out what market characteristics your target

market has. With market research companies can learn more about current and

potential customers.

The purpose of market research is to help companies make better business decisions

about the development and marketing of new products and in the case of financial

market research, it shows the company worthiness and position in front of people.

Market Research Process

Defining the Research Problem

Selecting and Establishing Research Design

Select the Research Design

Identify Information types and Sources

Determining and Design Research Instrument

Collecting and Analyzing Data

Formulate Findings

Method Adopting of Data Collection

There are two types of data collection technique. i.e.

Primary Data and

Secondary Data.

In my research project there is no need to collect primary data. I want only secondary

data that I have been collected by different sources.

Internet- From the internet we have take the histories of companies for the

introductionpart. We search some data from the website of company and search

engine like Google.

Books- Books are also helpful us for the data research. We have taken help of books

tocalculate the ratios and analyzing the financial statements like Profit & Loss

account and Balance sheet etc.

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Finding/Facts By this project I found that company position is not that much good right now

because of slowdown in year 2005-06 and that impacted a lot on companys

ratio.

The ratio like Current Ratio, Quick Ratio, Earning par share, Return on Capital

Employed or Shareholder Funds, Operating Profit, Net Profit Margin and Debt-Equity

Ratio are in decline position.

These ratios show that company is not utilizing its fund properly and theworking capital requirement is highly.By this project I found that the operating expenses are very high due torecovery period from global slowdown.I found that if company will focus on its liabilities so they can overcomefrom the negative growth.The cash flow statement shows its working.

The credit rating that the company got in year 2205 was very good. But after

that recession it changed, here credit rating play very important role because almost

60% investors invest their money on the basis of goodwill or credit rating that a

company hold in the market.

1.As the people think that insurance is a tool to protect their family & a tax saving

device. They are aware of the fact & realizing its, importance. The company should

try to expand & build up its infrastructure because there is a large potential for

insurance in India.

2.Company should come up with its branch in Delhi. With the objective and goals to

meet the demands & expectations of the public. Because the entrance of private

players will increase the competition and it would be a tough task to secure a good

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position in market.

3.Since Aviva Life Insurance is leading with several companies policies it should be

easy for them to penetrate into the market and secure a good position if they pay

greater attention to the service part provided to their customer and thereby forming a

long and trusted relationship.

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LIMITATIONS OF THE RESEARCH

1. The research is confined to a certain parts of Delhi and does not necessarily

shows a pattern applicable to all of

Country.

2. Some respondents were reluctant to divulge personal information which can

affect the validity of all responses.

3. In a rapidly changing industry, analysis on one day or in one segment can

change very quickly. The environmental changes are vital to be considered in

order to assimilate the findings.

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DATA ANALYSIS

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Data Analysis

Q1. Are you currently insured?

Particulars No. of Respondents Percentage

Yes 31 62%

No 19 38%

Total 50 100%

No. of Respondents

31

19

Yes

No

Q2. Are you satisfied with your current insurer?

60

ANALYSIS:

From the survey it was found that amongst 50 respondents

a) 62% of the respondents are already insured.b) 38% of the respondents are not insured.

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Q3. Which one is your favored insurance company?


LIC 24 48%ICICI 7 14%

HDFC 5 10%

Birla Sun Life 4 8%

Bajaj Allianz 4 8%

Others 6 12%

Total 50 100%

62

0

0.1

0.2

0.3

0.4

0.5

0.6

LIC ICICI HDFC Birla Sun BajajAllianz

Others

Insurance companies

Sharein

ANALYSIS:


a) 48% of the respondents likes LIC.b) 14% of the respondents likes ICICI.c) 10% of the respondents likes HDFC.d) 8% of the respondents likes Birla Sun Life.e) 8% of the respondents likes Bajaj Allianz.f 12% of the res ondents likes other com anies.

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Q5. What is your main concern while taking an insurance policy ?


Tax Benefit 20 40%Security 16 32%

Investments/Savings 14 28%

Total 50 100%

2016 14

0

5

10

15

20

25

TaxBe

nefit

Secu

rity

Inve

stment/S

avin

gs

No.ofRespon

dents

Series1

64

ANALYSIS:


a) 40% of the respondents are concerned about Tax Benefit.

b) 32% of the respondents are concerned about their Security.c) 28% of the respondents are concerned aboutInvestment/Savings.

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Q6.Does this policy satisfy your financial needs? (Please rate onthe scale of 1 to 5 with 1 being least satisfied)

Rating No. of Respondents Percentage

1 9 18%

2 9 18%

3 8 16%

4 10 20%

5 14 28%

Total 50 100%

1

2

3

4

5

1

2

3

4

5

65

ANALYSIS:


a) 18% of the respondents are Highly unsatisfied.b) 18% of the respondents are Unsatisfied.c) 16% of the respondents are Moderate.d) 20% of the respondents are Satisfied.e) 28% of the respondents are Highly satisfied.

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Q7.Please express your opinion for the premiums paid for theabove policy?


Very High 14 28%

High 11 22%

Moderate 13 26%

Low 8 16%

Very Low 4 8%

Total 50 100%

66

ANALYSIS:


a) 28% of the respondents think that Premium is Very High.b) 22% of the respondents think that Premium is High.c) 23% of the respondents think that Premium is Moderate.d) 15% of the respondents think that Premium is Low.e) 12% of the respondents think that Premium is Very Low.

No. of Respondents

14

1113

8

4

Very High

High

Moderate

Low

Very Low

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Q8.How do you come to know about this policy?


Advertisements 10 20%

Friends andRelatives

12 24%

Direct Selling Agents 21 42%

Others 7 14%

Total 50 100%

67

ANALYSIS:


a) 20% of the respondents know about it from Advertisements.b) 24% of the respondents know about it from Friends andRelatives.c) 42% of the respondents know about it from Direct SellingAgents.d) 14% of the respondents know about it from Other Sources.

No. of Respondents

10

12

21

7

Advertisements

Friends and Relatives

Direct Selling Agents

Others

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Q9. Are you satisfied with the incentives (tax benefits or Bonuses)associated with your policy?

Rating No. of Respondents Percentage

Highly satisfied 9 18%

Satisfied 12 24%

Moderate 10 20%

Unsatisfied 11 22%

Highly Unsatisfied 8 16%

Total 50 100%

68

ANALYSIS:


a) 18% of the respondents are Highly Satisfied.b) 24% of the respondents are Satisfied.c) 20% of the respondents are Moderate.d) 22% of the respondents are Unsatisfied.e) 16% of the respondents are Highly Unsatisfied.

No. of Respondents

9

12

10

11

8

Highly Satisfied

Satisfied

Moderate

Unsatisfied

Highly Unsatisfied

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Q10. According to you, in what areas should the insurance companieswork upon?


Easy Procedures 14 28%

Fewer premiums 10 20%

More Returns 9 18%

Transparency 17 34%

Total 50 100%

14

10 9

17

0

2

4

6

8

10

12

14

16

18

Easy Returns Fewer

premiums

More Returns Transperancy

No.ofRespondents

Series1

69

ANALYSIS:


a) 28% of the respondents want Easy procedures.b) 20% of the respondents want Fewer premiums.c) 18% of the respondents want More returns.d) 34% of the respondents want Transparency.

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Q11. Do You think that services have improve

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