Consumer Perception on Life Insurance with refrence to State Bank of India Life India Life Insurance

10,400 views
9,293 views

Published on

this project is related to Consumer Perception on Life Insurance with reference to State Bank of India Life India Life Insurance

Published in: Economy & Finance, Business
13 Comments
19 Likes
Statistics
Notes
  • plzzz share this project on chanchalsharma.dbz48@yahoo.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • i need this project sir...pls share..angel143helan@gmail.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • did anyone got this project?
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • sir will u plz share the project on mskmadhukar@gmail.com.
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Sir I need project report plz send email-id monali.gokhale5@gmail.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
10,400
On SlideShare
0
From Embeds
0
Number of Embeds
136
Actions
Shares
0
Downloads
0
Comments
13
Likes
19
Embeds 0
No embeds

No notes for slide

Consumer Perception on Life Insurance with refrence to State Bank of India Life India Life Insurance

  1. 1. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 1 UNIVERSITY OF MYSORE Department of Studies in Commerce Manasagangothri, Mysore “CONSUMER PERCEPTION ON LIFE- A STUDY ON STATE BANK OF INDIA LIFE INSURANCE IN KRISHNARAJANAGARA” Project Submitted in partial fulfillment for the award of MASTER OF COMMERCE Degree as prescribed by University of Mysore Submitted by: JAYANTH KUMAR K.R Reg. No. CM112031 M.Com. IV Semester Department of Studies in Commerce Under the guidance of: Dr. M. L. ASHOKA Guide &Faculty Department of Studies in Commerce University of Mysore 2013- 2014
  2. 2. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 2 UNIVERSITY OF MYSORE Dr. H. RAJASHEKAR Professor & Chairman, DOS in Commerce, Manasagangotri, Mysore. BONAFIDE CERTIFICATE This is to certify that that Mr. JAYANTH KUMAR K.R (Register No: (CM112031) is a student of final year M.Com, DOS in Commerce, Manasagangotri, Mysore during the academic year 2013-14. The Project report entitled “CONSUMER PERCEPTION ON LIFE- A STUDY ON STATE BANK OF INDIA LIFE INSURANCE IN KRISHNARAJANAGARA” is prepared and submitted by him/her under my guidance in partial fulfillment of the requirements of final year M.com examination during the academic year 2013-14. DATE: PLACE: MYSORE (Dr. H. RAJASHEKAR) CHAIRMAN
  3. 3. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 3 UNIVERSITY OF MYSORE Dr.M. L. ASHOKA, M.com, ph.d Professor, Faculty of Commerce and Management, DOS in Commerce, Manasagangotri, Mysore. GUIDE’S CERTIFICATE This is to certify that Mr. JAYANTH KUMAR K.R (Register No: CM112031) is a student of final year M.Com, DOS in Commerce, Manasagangotri, Mysore during the academic year 2013-14. The Project report entitled “CONSUMER PERCEPTION ON LIFE INSURANCE- A STUDY ON STATE BANK OF INDIA LIFE INSURANCE IN KRISHNARAJANAGARA” is prepared and submitted by him under my guidance in partial fulfillment of the requirements of final year M.com examination during the academic year 2013- 14. DATE: PLACE: MYSORE (Dr. M. L. ASHOKA) Guide & Faculty
  4. 4. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 4 DECLARATION I Mr. JAYANTH KUMARA K.R (Register No: CM112031) student of final year M.Com, DOS in Commerce, Manasagangotri, University of Mysore, bearing the Reg. No. CM112031, hereby declare that the project work entitled " CONSUMER PERCEPTION ON LIFE INSURANCE- A STUDY ON STATE BANK OF INDIA LIFE INSURANCE IN KRISHNARAJANAGARA" has been carried out by me entirely under the guidance of Dr.M.L.ASHOKA.M.com, Ph.d, Faculty of Commerce and Management, DOS in Commerce, Manasagangotri, Mysore. Further, I declare that the Project Work submitted in a partial fulfillment for the award of degree of "MASTER OF COMMERCE" in the DOS IN COMMERCE, MANASAGANGOTRI, UNIVERSITY OF MYSORE, MYSORE, during the academic year 2013-14. And to the best of my knowledge, the Project Work does not form part of any thesis or dissertation on the basis of which the degree was conferred on an earlier occasion or any other candidate. Date: Place: Mysore (JAYANTH KUMAR K.R)
  5. 5. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 5 ACKNOWLEDGEMENT “Happiness cannot be expressed by words, and help taken cannot be left unthankful. I would like to thank all of them, who were part of my work and my life” Doing this project is an exciting experience to me. It was not just a part of my academic curriculum; it is a different exposure, a challenge. A chance to explore a new experience which involved a lot of running around, interaction with lot of people, learning a lot of new thing so on and so forth. The project work would not have been completed without the support and encouragement of all those, whom I would like to, thank for their help and encouragement in this endeavor. I was excited when Dr. H. RAJASHEKAR, Professor and Chairman, Department of studies in commerce, University of Mysore, Manasagangothri, Mysore. Suggested and approved the subject for my project work. I sincerely thank him for all the help, guidance, support and encouragement extended to me in completing this research work. I would like to express my sincere gratitude to DR. M. L. ASHOKA, Guide &Faculty, DOS in Commerce, Manasagangothri, Mysore, Who absolutely showed great zeal and enthusiasm in this project work by guiding me, with deep sense of involvement and confidence in bringing this project report. My father was main soul for my confidence, determination and strength throughout my life. Their sweat hopes and wishes have made me able to present this work. So not thanking my friends and remembering them will be a fault on my part. Their help in every field has made me possible to present this tedious work. I extend my thanks to all my friends who kindly supported me in all means. (JAYANTH KUMAR K.R)
  6. 6. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 6 CONTENTS CHAPTERS CHAPTER NAME PAGE NO. 1 INTRODUCTION 01-08 2 THEORETICAL FRAMEWORK 09-22 3 PROFILE OF THE STUDY 23-83 4 DATA ANALYSIS AND INTERPRETATION 84-107 6 FINDINGS, SUGGESTIONS AND CONCLUSION 108-111 BIBLIOGRAPHY 111-112 ANNEXURE 113-116
  7. 7. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 7 LIST OF TABLES TABLE NO. TABLE TITLE PAGE NO. 2.1 Shows the benifits of insurance 14 2.2 Shows the plans that are appropriate for different life stages 16 3.1 Shows the number of public life and non-life insurance companies 25 3.2 Shows the life insurers in india 34-37 3.3 Shows the board of members of SBI Life Insurance 48 4.1 Shows the Gender wise distribution of respondents 85 4.2 Shows the Age group of respondents 86 4.3 Shows the education knowledge of respondents 87 4.4 Shows the Qualification of respondents 88 4.5 Shows the Occupation of respondents 89 4.6 Shows the Income group of respondents 90 4.7 Shows the respondent’s investment as percentage of annually 91 4.8 Shows the kind of investment preferred by respondents 92 4.9 Shows the reason for choosing SBI life insurance 93 4.10 Shows the Respondents knowing about SBI life insurance 94
  8. 8. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 8 4.11 Shows the Respondents purchasing decision influence 95 4.12 Shows the Respondent’s purpose for buying an insurance policy 96 4.13 Shows the Life insurance plan taken by respondents 97 4.14 Shows the Insurance policies taken by respondents 98 4.15 Shows the Features of the insurance policy attracted customers 100 4.16 Shows the term of respondent’s life insurance policy 101 4.17 Shows the value of respondent’s life insurance policy 102 4.18 Shows the Annual premium paid by respondents 103 4.19 Shows the way of paying premium 104 4.20 Shows the Period interval on paying premium 105 4.21 Shows the Satisfaction level of customer in return on investment 106 4.22 Shows the Respondents rating with the service offered by SBI life insurance 107
  9. 9. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 9 LIST OF CHARTS CHART NO. CHART TITLE PAGE NO. 4.1 Shows the Gender wise distribution of respondents 85 4.2 Shows the Age group of respondents 86 4.3 Shows the education knowledge of respondents 87 4.4 Shows the Qualification of respondents 88 4.5 Shows the Occupation of respondents 89 4.6 Shows the Income group of respondents 90 4.7 Shows the respondent’s investment as percentage of annually 91 4.8 Shows the kind of investment preferred by respondents 92 4.9 Shows the reason for choosing SBI life insurance 93 4.10 Shows the Respondents knowing about SBI life insurance 94 4.11 Shows the Respondents purchasing decision influence 95 4.12 Shows the Respondent’s purpose for buying an insurance policy 96 4.13 Shows the Life insurance plan taken by respondents 97 4.14 Shows the Insurance policies taken by respondents 98
  10. 10. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 10 4.15 Shows the Features of the insurance policy attracted customers 100 4.16 Shows the term of respondent’s life insurance policy 101 4.17 Shows the value of respondent’s life insurance policy 102 4.18 Shows the Annual premium paid by respondents 103 4.19 Shows the way of paying premium 104 4.20 Shows the Period interval on paying premium 105 4.21 Shows the Satisfaction level of customer in return on investment 106 4.22 Shows the Respondents rating with the service offered by SBI life insurance 107
  11. 11. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 11 CHAPTER-1 INTRODUCTION 1.1 INTRODUCTION Life is full of risk and uncertainties. Since we are the social human being we have certain responsibilities too. Indian consumers have big influence of emotions and rationality on their buying decisions. They believe in future rather than the present and desire to have a better and secured future, in these direction insurance services have its own value in terms of minimizing risk and uncertainties. Insurance is a basic form of risk management which provides protection against possible loss to life or physical assets. Life insurance is one of the best known insurance products today. People buy these products as investment tools and also as protection for themselves and their families. Gradually as competition increased benefits given by industry to its customers increased by leaps and bounds. Person who seeks protection against such loss is termed as insured, and company that promises to honor claim, in case such loss is actually incurred by insured, is termed as Insurer. In order to get insurance, insured is required to pay to insurance company a certain amount called premium. Premium is collected by insurance companies which acts as trustee to pool created through contributions made by persons seeking to protect themselves from common risk. Any loss to the insured in case of happening of an uncertain event is paid out of this pool. 1.2 BACKGROUND OF THE STUDY Insurance occupies an important position in the financial sector of an economy. India is a country where the average selling of Life insurance policies is still lower than many Western and Asian countries, with the second largest population in world the Indian insurance market is looking very prospective to many multinational and Indian insurance companies for expanding their business and market share. Before the opening of Indian market for Multinational Insurance Companies, Life Insurance Corporation (LIC) was the only company which dealt in Life Insurance and after opening of this sector to other private companies, all the world leaders of life insurance has started their operation in India. With their world market experience and
  12. 12. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 12 network, these companies have offered many good schemes to all type of Indian consumers but unfortunately failed to get the major share of market. Still the LIC is the biggest player in the life insurance market with approx 72.70% market share (As per IRDA annual report 2012- 2013). The insurance business in India is projected to reach Rs 4 trillion (US$ 63.01 billion) in FY 2013–14, according to Mr. TS Vijayan, Chairman, IRDA. Total premiums collected by the general and the life insurance industry in FY 2012–2013 amounted to Rs 3.75 trillion (US$ 59.07 billion). The chairman believes that insurance penetration in India has the potential to rise to 5–6 percent from the current 3.86 per cent. The life insurance companies are issued 44.1-million new policies in 2012-13 in which Private life insurers had covered 5.02 million lives and LIC covered 13.2 million lives in the year 2012-13.Customer loyalty depends on satisfaction of his multiple needs. The main objective of the paper is to study the policyholder’s perceptions on Life Insurance Policies with reference to Krishnarajanagara in Karnataka. 1.3 LITERATURE REVIEW Quality of life consists of various factors including health, community life, gender equality, political freedom, political stability and security, material well being, family life, and job security. In addition to it, insurance against illness or death is also considered as indicator for quality of life in developing countries. Being an indicator of quality of life, insurance has significance in human life. The literature of attitude and perception of life insurance policyholders have largely focused on factors predicting these attitudes (Skinner and Dubinsky, 1984; Kruse and Ozdemir, 2004). Factors such as consumers’ perceived value (Kuhlemeyer and Allen, 1999) and purchase decision-making responsibility (Barron and Staten, 1995) have been considered as most important them of the literature on attitude and perception of life insurance policyholders. For example, in a survey of 1,462 families, Skinner and Dubinsky found out that employment status of the wife and education of the husband discriminate mostly between which family member(s) is responsible for insurance purchasing decision. Other significant variables husband‘s employment status, KrusefamilyandOzdemir(2004)income, explore the relationship between individual‘s-to-pay for increased safety in risk a low-probability, high-consequence event.
  13. 13. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 13 A study conducted by Keerthi, R.Vijayalakshmi (2009) “A Study on the Expectations and perceptions of the services in private life insurance companies”. Smart the life insurance companies taken for study, the policy holders’ expectations are well met in the case of certain factors reacting to service quality. But in the case of other variables, there exists a significant gap which means that policy holders have experienced low levels of service as against their expectations. If all the players in the life insurance industry focus on the effective delivery of services, they can win the hearts of customers and anticipate their increased market share. A study conducted by S.Raju and M.Gurupandi (2009) article “Analysis of the Socio economic Back ground and attitude of the policy holders towards life insurance corporation of india”, Smart journal of Business Management Studies revealed that the study was of great help to the policy holders, as it was aimed finding the attitude towards the services of LIC Policy holders. Hence the prospective customers, who propose to buy the insurance products and avail of the services of an insurance company for the first time, can get benefited by the best service provider. A study conducted by Sunayna Khurana (2008)2 article “Customer Preferences in Life insurance industry in India”, revealed that the insurance sector plays a very important role in the development of any economy. It is necessary for the economic and overall development of any country. In today’s competitive economy, the business, finance and insurance sector plays a very important role. More and more job opportunities are available in these sectors. Dr.Praveen Sanu, Gaurav Jaiswal, Vijay Kumar Panday (2009)6 in their article, “ A study of buying behaviour of consumers towards LIC”, Prestige institute of Management and Research, Gwalior, revealed that in present Indian market, the investment habits of Indian consumers are changing very frequently. The individuals have their own perception towards various types of investment plans. The study of this research work was focused over consumer’s perception on investment towards Life Insurance Services. K. Selvavinayagam and R. Mathivanan (2010)7 article has revealed that the competitive climate in the Indian insurance market has changed dramatically over the last few years. At the same time, changes have been taking place in the government regulations and technology. The expectations of policy holders are also changing. The existing insurance companies have to
  14. 14. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 14 introduce many new products in the market, which have competitive advantage over the products of life insurance companies. A.Srujan (Insurance marketing July 2004) in his article “Rural insurance market in India” States that the growth in the insurance sector is higher than the GDP growth rate of the country. A careful analysis of postal liberalization period suggest that new insurance players made a good start while the existing one maintained consistent growth level. The two segments of Indian insurance market i.e., Urban and Rural have their own characteristic features. The economic growth of the two has not been the same. But there is a fact that most of the new insurance companies started operating from metros and urban. So they got more opportunity to cover by several types of insurance. Moreover due to the better educational status they got awareness about several financial and insurance products. Still there are many opportunities in rural insurance market. Gigantic population, growth in income level of rural population, high saving habits etc. are some plus areas and if we exploit these areas, there in a very good scope for the growth. Government of India makes steps to improve the conditions of the rural area. Janasree Bima Yojna, LALGI etc. are some examples. Government made a tie with LIC and made several scheme for rural people like Siksha Sahayog Yojna, Krishi Shrimik Samajik suraksha Yojna etc. Anyway it is the opportunities not compulsions which would drive the old and new players to rural India and the outcome will be steady and secured economic growth. 1.4 STATEMENT OF THE PROBLEM Investors are confusing because various insurance policies are available in market so this study will help us to understand the consumer’s perception about life insurance policies with respect to State Bank of India Life Insurance Company and how a consumer selects, organizes and interprets the Quality of service and product offered by the company.
  15. 15. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 15 1.5 SCOPE OF THE STUDY The scope of the study is limited to only insurance & no other financial instruments were considered .The study will help us to know the perception of customers about insurance policies with reference to State Bank of India life insurance. The various risks involves in buying an insurance policy and how to tackle it. It will also help us to get a basic knowledge about need analysis calculation and its requirement. 1.6 NEED FOR THE STUDY 1) The deeper the company understands of consumer’s needs and perception, the earlier the product is introduced ahead of competition, the greater the expected contribution margin. Hence the study is very important. 2) Consumer markets and consumer buying behavior can be understood before sound product and marketing plans are developed. 3) This study will help State Bank of India life insurance Company to customize the service and product, according to the consumer’s need. 4) This study will also help the company to understand the experience and expectations of the existing customers. 5) Apart from creating, manufacturing and distribution capabilities for life insurance products, and in depth study of the consumers, their preferences and demand for their product is very necessary for setting up an efficient marketing network. 1.7 OBJECTIVE OF THE STUDY 1. To understand the theoretical background of insurance. 2. To study the life insurance products offered by State Bank of India Life Insurance. 3. To examine the existing investment pattern among different age groups, different income categories and different occupations.
  16. 16. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 16 4. To analyze the selection of insurance products of State Bank of India Life Insurance. 1.8 LIMITATIONS 1. The study is limited to Krishnarajanagara only. 2. The study is limited due to constraint of time and information available 3. Possibility of error in data collection because many of respondent may have not given actual answers of questionnaire. 4. The study had done only on 125 respondents. 5. The study is limited to policy holders of State Bank of India Life Insurance. 1.9 RESEARCH METHODOLOGY Methodology is the systematic, theoretical analysis of the methods applied to a field of study. Project or research study methodology gives a clear picture of suitable classification and sequence of different stage of study as to arrive at proper manifestation of the objective, scope and limitation of study. The study is carried out to understand the Consumer Perception about life insurance policies with reference to State Bank of India Life Insurance in Krishnarajanagara .Exploratory research is using for this study. This research covers 123 consumers in Krishnarajanagara, belonging to various age groups, qualification, occupation and income level. 1.9.1 Population: Population included existing customers of State Bank of India life insurance in Krishnarajanagara. 1.9.2 Sampling Unit: Since the data was collected through personal contacts, the sample unit of this survey was the existing customers of State Bank of India life insurance in Krishnarajanagara, KARNATAKA.
  17. 17. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 17 1.9.3 Sampling elements: Individual respondents were the sampling elements. 1.9.4 Sample Size: The sample size was 125 customers of State Bank of India Life Insurance Company, from various parts of the Krishnarajanagara. 1.9.5 Sampling Technique Adopted: Convenient sampling 1.9.6 Analysis: The data for study was collected both from primary and secondary sources. Percentage and graphs are used to show the data more clearly. Out of 125 respondents, data is collected from 123 respondents only. 1.9.7 Tools Used for Data Collection Self designed questionnaire was used to study the evaluation of factors affecting consumer’s perception towards State Bank of India Life Insurance. 1.9.8 Tools Used for Data Analysis To fulfill the objectives of the study percentage analysis, Bar graph and Pie charts are used. 1.10 SOURCE OF DATA 1.10.1 Primary Data: The primary data are those which are collected afresh and for the first time, and thus happened to be original in character. There are several methods of collecting primary data particularly in surveys. For the study: Questionnaire method is used for collecting the data while conducting the research.
  18. 18. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 18 1.10.2 Secondary Data: The secondary data are those which have already been collected by someone and which have already been passed through the statistical process. Secondary data may either be published data or un- published data. For this study the secondary data was collected from the following sources.  Books related to insurance  Websites related to insurance 1.11 CHAPTERISATION PLAN 1. Introduction This chapter covers introduction, review of literature, statement of the problem, objectives of the study, need of the study, scope of the study, research methodology, sampling design and limitations of the study. 2. Theoretical aspects on Insurance: This chapter deals with the theoretical aspects of performance management system. 3. Profile of the study: This chapter deals with the insurance industry of India and company profile of State Bank of India Life Insurance Company Ltd. 4. Analysis and interpretation of data: This chapter covers the analysis of data collected through primary and secondary source to study the topic. 5. Major findings, suggestions and conclusion: This chapter summarizes and comprises of major findings. It also deals with suggestions and conclusions.
  19. 19. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 19 CHAPTER- 2 THEORETICAL FRAMEWORK 2.1 MEANING OF INSURANCE Insurance may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance is a collective bearing of risk. Insurance spreads the risks and losses of few people among a large number of people as people prefer small fixed liability instead of big uncertain and changing liability. Insurance is a scheme of economic cooperation by which members of the community share the unavoidable risks. Insurance can be defined as a legal contract between two parties whereby one party called Insurer undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain. The other party called Insure or Insurant pays in exchange a fixed sum known as premium. The insurer and the insurant are also known as Assurer or Underwriter and Assurant, respectively. The document which embodies the contract is called the policy. 2.2 DEFINITION “Insurance is a contract in which sum of money is paid to the assured in consideration of insurer’s incurring risk of paying a large sum upon a given contingency.” -JUSTICE TINDALL “Insurance is a contract by which one party for a compensation called in the premium assumes particular risks of the other party and promises to pay to him or his nominee a certain sum of money on a specified contingency.” -E.W.FITTERSON “Insurance may be described as social device whereby a large group of individuals, through a system of equitable contribution, may reduce certain measurable risk of economic loss common to all members of the group.” -ENCYCLOPEDIA BRITANNICA
  20. 20. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 20 2.3 ORIGIN OF INSURANCE Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of the caravan trade by giving loans that had to be later repaid with interest when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the practice that, perhaps, was how insurance made its beginning. Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would meet the funeral expenses of its members as well as help survivors by making some payments. As European civilization progressed, its social institutions and welfare practices also got more and more refined. With the discovery of new lands, sea routes and the consequent growth in trade, medieval guilds took it upon themselves to protect their member traders from loss on account of fire, shipwrecks and the like. Since most of the trade took place by sea, there was also the fear of pirates. So these guilds even offered ransom for members held captive by pirates. Burial expenses and support in times of sickness and poverty were other services offered. Essentially, all these revolved around the concept of insurance or risk coverage. That's how old these concepts are, really In 1347, in Genoa, European maritime nations entered into the earliest known insurance contract and decided to accept marine insurance as a practice. The first step: Insurance as we know it today owes its existence to 17th century England. In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, where merchants, ship-owners and underwriters met to discuss and transact business. By the end of the 18th century, Lloyd's had brewed enough business to become one of the first modern insurance companies. Enter companies: The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia sponsored the first life
  21. 21. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 21 insurance corporation in America for the benefit of ministers and their dependents. However, it was after 1840 that life insurance really took off in a big way. The trigger: reducing opposition from religious groups. The growing years: The 19th century saw huge developments in the field of insurance, with newer products being devised to meet the growing needs of urbanization and industrialization. In 1835, the infamous New York fire drew people's attention to the need to provide for sudden and large losses. Two years later, Massachusetts became the first state to require companies by law to maintain such reserves. The great Chicago fire of 1871 further emphasized how fires can cause huge losses in densely populated modern cities. The practice of reinsurance, wherein the risks are spread among several companies, was devised specifically for such situations. There were more offshoots of the process of industrialization. In 1897, the British government passed the Workmen's Compensation Act, which made it mandatory for a company to insure its employees against industrial accidents. With the advent of the automobile, public liability insurance, this first made its appearance in the 1880s, gained importance and acceptance. In the 19th century, many societies were founded to insure the life and health of their members, while fraternal orders provided low-cost, members-only insurance. Even today, such fraternal orders continue to provide insurance coverage to members as do most labour organizations. Many employers sponsor group insurance policies for their employees, providing not just life insurance, but sickness and accident benefits and old-age pensions. Employees contribute a certain percentage of the premium for these policies. In India: Insurance in India can be traced back to the Vedas. For instance, Yogakshema, the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term
  22. 22. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 22 suggests that a form of "community insurance" was prevalent around 1000 BC and practised by the Aryans. Burial societies of the kind found in ancient Rome were formed in the Buddhist period to help families build houses, protect widows and children. Bombay Mutual Assurance Society, the first Indian life assurance society, was formed in 1870. Other companies like Oriental, Bharat and Empire of India were also set up in the 1870- 90s. It was during the Swadeshi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up. As these companies grew, the government began to exercise control on them. The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds. By the mid- 1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalise the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies. For years thereafter, insurance remained a monopoly of the public sector. It was only after seven years of deliberation and debate –after the RN Malhotra Committee report of 1994 became the first serious document calling for the re-opening up of the insurance sector to private players that the sector was finally opened up to private players in 2001. 2.4 TYPES OF INSURANCE CONTRACT  Life insurance  General insurance 2.4.1 Life Insurance Products Life insurance is a contract for payment of money to the person assured (or to the person entitled to receive the same) on the occurrence of an event insured against.
  23. 23. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 23 Usually the contract provides for – Payment of an amount may be on the date of maturity or at specified periodic intervals or after death, if it occurs earlier. Periodical payment of insurance premium can be done by the assured to the corporation who provides the insurance. 2.4.2 General Insurance Products 2.4.2.1 Fire Insurance: Fire Insurance is a comprehensive policy which covers loss on account of fire, earth quake, riots, floods, strikes, and malicious intent. It can be taken only by the owner of the premises to be insured. 2.4.2.2 Motor Insurance: This covers: In motor insurance, the rates were revised. Upwards twice, once in 1982 and then in1990 as the high cost of repairs coupled with third party claims had adversely affect the insured loss ratio. Motor insurance is mandatory leading to good amount of premium collection but it is not being fancied upon as it could lead to litigation problem. 2.4.2.3 Marine Cargo Insurance: This covers: a. Cargo in Transit. b. Cargo Declaration policy. It includes insurance of Marine Hull Insurance Inland Vessels, Ocean going Vessels, fishing and scaling vessels, freight at risk, construction of ships, voyage insurance of various vessels, ship breaking insurance, oil and energy in respect of onshore and offshore risks, including construction risk.
  24. 24. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 24 2.5 BENEFITS OF INSURANCE TABLE 2.1 Investment option It is good investment option because insurer will not get the insurance cover but also the in some amount of return. Tax benefits We can also save tax up to RS 100000. Loan on insurance Customer can also take loan against insurance policies. Habits of saving It also develops the habits of saving certain amount of money which can be helpful in future. Employment generation An increase in the penetration of insurance is going to generate more employment as insurance policies will require more advisors. Social benefits It is going to help in developing the infrastructure of the country. 2.6 NEED FOR INSURANCE Who will take care of my family if tomorrow something unfortunate happens to me?” If this question bothers us, then Life Insurance is the answer. Of course, under any circumstances, the loss of a loved one is a traumatic experience. But, if our family is also left without sufficient money to meet basic living needs or prepare for future goals, they will have to cope with a financial crisis at the same time. A Life Insurance plan ensures that our family is financially secure even if tomorrow we are no longer around to care for them. Life insurance, especially tailored to meet our financial needs. 2.6.1 Need for Life Insurance Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing our hard-earned money. Life insurance is a unique investment that helps us to
  25. 25. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 25 meet our dual needs - saving for life's important goals, and protecting our assets. Let us look at these unique benefits of life insurance in detail. 2.6.2 Asset Protection From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation. The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer. 2.6.3 Goal based savings Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence. Clearly, as our life stage and therefore our financial goals change, the instrument in which we invest should offer corresponding benefits pertinent to the new life stage. Life insurance is the only investment option that offers specific products tailor made for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met.
  26. 26. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 26 The table below gives a general guide to the plans that are appropriate for different life stages. TABLE 2.2 g LIFE STAGE PRIPPRIMARY NEEDS Life Insurance Product Life Insurance Product Young & Single Asset creation Wealth creation plans Young & Just married Asset creation & protection Wealth creation and mortgage protection plans Married with kids Children's education, Asset creation and protection Education insurance, mortgage protection & wealth creation plans Middle aged with grown up kids Planning for retirement & asset protection Retirement solutions & mortgage protection Across all life- stages Health plans Health Insurance 2.7 FUNCTIONS AND CHARACTERSTICS OF INSURANCE:- 2.7.1 Provide protection: The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. 2.7.2 Sharing of risk: Insurance is an instrument to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the
  27. 27. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 27 insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. 2.7.3 Small capital to cover larger risk: Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. 2.7.4 Contribute towards the Development of country: Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. 2.7.5 Means of savings and investment: Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income- tax exemptions also, people invest in insurance. 2.8 STAGES IN POLICY INSUANCE 1. Proposal: A Proposal stage is the first stage before the policy is issued at COPS. At this stage, the application form is received by COPS, but it is pending for issuance due to further clarifications required from the customer. 2. Login: A Proposal which is complete i.e., duly filled with all necessary documents attached to it and accepted by the branch cops is called a login. 3. Reject: An Application gets rejected at the branch cops level due to necessary details not filled in the form or necessary documents not submitted is a Reject. It is then sent back to the advisor for completion. 4. Issuance: Issuance means a policy that is issued to the customer central cops.
  28. 28. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 28 5. Decline status: When a customer refuses to take a policy post login but before issuance is called a Decline. 6. Cancellation: When the Cheque given by the customer bounces, it amounts to the cancellation of the policy. 7. Lapse: A Policy for which the customer fails to pay subsequent premiums is a lapsed policy. 8. Free look: Post issuance of the policy, the policyholder has the option to turn down the policy within 15 days from the date of issuance. This period of 15 days is called Free look period. 9. Surrender: When a customer wants to discontinue with the policy. 2.9 LIFE INSURANCE Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a premium paid undertakes to pay a fixed sum of money on the death of the insured or on the expiry of a specified period of time whichever is earlier. In case of life insurance, the payment for life insurance policy is certain. The Event insured against is sure to happen only the time of its happening is not known. So life insurance is known as “Life Assurance”. The subject matter of insurance is life of human being. Life insurance provides risk coverage to the life of a person. On death of the person insurance offers protection against loss of income and compensate the titleholders of the policy. 2.10 DEFINITION “A contract of life assurance is that in which one party agrees to pay a given sum on the happening of a particular event contingent upon the duration of human life in consideration of immediate payment of a smaller sum by another.” A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.
  29. 29. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 29 2.11 TYPES OF LIFE INSURANCE 1. Term Insurance Policy 2. Whole life Insurance Policy 3. Endowment Policy 4. Pure Endowment Policy 5. Money Back Policy Most of the products offered by Indian life insurers are developed and structured around these "basic" policies and are usually an extension or a combination of these policies. 2.11.1 Term Insurance Policy: A term insurance policy is a pure risk cover for a specified period of time. What this means is that the sum assured is payable only if the policyholder dies within the policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family is entitled to the money if he dies within that 15-year period. There is no element of savings or investment in such a policy. It is a 100 per cent risk cover. It simply means that a person pays a certain premium to protect his family against his sudden death. He forfeits the amount if he outlives the period of the policy. This explains why the Term Insurance Policy comes at the lowest cost. 2.11.2 Whole life Insurance Policy As the name suggests, a Whole Life Policy is an insurance cover against death, irrespective of when it happens. Under this plan, the policyholder pays regular premiums until his death, following which the money is handed over to his family. This policy, however, fails to fulfill the additional needs of the insured during his post-retirement years. It doesn't take into account a person's increasing needs either. While the insured buys the policy at a young age, his requirements increase over time. By the time he dies, the value of the sum assured is too low to
  30. 30. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 30 meet his family's needs. As a result of these drawbacks, insurance firms now offer either a modified Whole Life Policy or combine in with another type of policy. 2.11.3 Endowment Policy Combining risk cover with financial savings, endowment policies is the most popular policies in the world of life insurance.  In an Endowment Policy, the sum assured is payable even if the insured survives the policy term.  If the insured dies during the tenure of the policy, the insurance firm has to pay the sum assured just as any other pure risk cover. 2.11.4 Pure Endowment Policy: A pure endowment policy is also a form of financial saving, whereby if the person covered remains alive beyond the tenure of the policy; he gets back the sum assured with some other investment benefits. 2.11.5 Money Back Policy These policies are structured to provide sums required as anticipated expenses (marriage, education, etc) over a stipulated period of time. With inflation becoming a big issue, companies have realized that sometimes the money value of the policy is eroded. That is why with-profit policies are also being introduced to offset some of the losses incurred on account of inflation.  A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable.  In case of death, the full sum assured is payable to the insured.  The premium is payable for a particular period of time.. In addition to the basic policy, insurers offer various benefits such as double endowment and marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its value.1
  31. 31. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 31 2.12 ROLE OF THE LIFE INSURANCE 1. Life insurance as an investment: - Insurance products yield more than any other investment instruments and it also provides added incentives or bonus offered by insurance companies. 2. Life insurance as risk cover:- Insurance is all about risk cover and protection of life. Insurance provides a unique sense of security that no other form of invest can provide. 3. Life insurance as tax planning:- Insurance serves as an excellent tax saving mechanism. Government gives tax relaxation on every life insurance policy. 2.12 IMPORTANCE OF THE LIFE INSURANCE 1. Protection against untimely death: - Life insurance provides protection to the dependents of the life insured and the family of the assured in case of his untimely death. The dependents or family members get a fixed sum of money in case of death of the assured. 2. Saving for old age: - After retirement the earning capacity of a person reduces. Life insurance enables a person to enjoy peace of mind and a sense of security in his/her old age. 3. Promotion of savings: - Life insurance encourages people to save money compulsorily. When life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he cannot get back the premiums, only surrender value can be returned to him. In case of surrender of policy, the policyholder gets the surrendered value only, after the expiry of duration of the policy. 4. Initiates investments: - Life Insurance Corporation encourages the public savings and canalizes the same in various investments for the economic development of the country. Life insurance is an important tool for the collection of small savings.
  32. 32. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 32 5. Credit worthiness: - Life insurance policy can be used as a security to raise loans. It improves the credit worthiness of business. 6. Social Security: - Life insurance is important for the society as a whole also. Life insurance enables a person to provide for education and marriage of children and for construction of house. It helps a person to make financial base for future. 7. Tax Benefit: - Under the Income Tax Act, premium paid is allowed as a deduction from the total income under section 80C.
  33. 33. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 33 CHAPTER-3 PROFILE OF THE STUDY 3.1 INDIAN INSURANCE INDUSTRY The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the country’s GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation “Malhotra Committee” was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.
  34. 34. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 34 3.2 A BRIEF HISTORY OF INDIAN INSURANCE MARKET Insurance has a long history in India. In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), 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. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b) Nationalization and c) Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001.
  35. 35. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 35 3.3 Number of Public and Private Life and Non-Life Insurance Companies TABLE 3.1 Type of Business Number of Public Sector Companies Number of Private Sector Companies Total Life Insurance 1 12 13 Non- Life(General)Insurance 6 8 14 Reassurance 1 0 1 Total 8 20 28 3.4 INDIAN INSURANCE INDUSTRY CURRENT SCENARIO The future of the Indian insurance sector looks bright. The sector which stood at a strong US$ 72 billion in 2012 has the potential to grow to US$ 280 billion by 2020. This growth is driven by India’s favorable regulatory environment which guarantees stability and fair play. This environment has given rise to an insurance market which encourages foreign investors to tap into the sector’s massive potential. The insurance business in India is projected to reach Rs 4 trillion (US$ 63.01 billion) in FY 2013–14, according to Mr TS Vijayan, Chairman, IRDA. Total premiums collected by the general and the life insurance industry in FY 2012–2013 amounted to Rs 3.75 trillion (US$ 59.07 billion). The chairman believes that insurance penetration in India has the potential to rise to 5–6 per cent from the current 3.86 per cent. The life insurance companies are issued 44.1- million new policies in 2012-13 In which Private life insurers had covered 5.02 million lives and LIC covered 13.2 million lives in the year 2012-13.
  36. 36. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 36 In life insurance business, India is ranked 10th among the 88 countries, for which data are published by Swiss Re. During 2012. Life insurance industry recorded a premium income of Rs.2, 87,202 crore during 2012-13 as against Rs.2, 87,072 crore in the previous financial year, registering growth of 0.05 per cent (1.57 per cent decline in previous year). While private sector insurers posted 6.87 per cent decline (4.52 per cent decline in previous year) in their premium income, LIC recorded 2.92 per cent growth (0.29 per cent decline in previous year). the life insurance premium in India declined by 6.9 per cent (inflation adjusted). During the same period, the global life insurance premium increased by 2.3 per cent. India’s share in global life insurance market was 2.03 per cent during 2012, as against 2.30 per cent in 2011.The total non-life insurance premium increased to Rs.62,973 crore in 2012-13 as compared to Rs.52,876 crore in 2011-12. The growth rate of premium of non-life insurance sector declined to 19.10 per cent in 2012-13 as compared to 24.19 per cent in 2011-12. The life industry paid higher gross benefits of Rs.1, 92,493 crore in 2012-13 (Rs.1, 53,079 crore in 2011-12) constituting 67.02 per cent of the gross premium underwritten (53.32 per cent in 2011-12). The benefits paid by the private insurers stood at Rs.57, 571 crore (Rs.35, 581 crore in 2011-12) constituting 73.43 per cent of the premium underwritten (42.27 per cent in 2011-12). LIC paid benefits of Rs.1, 34,922 crore in 2012-13, constituting 64.62 per cent of the premium underwritten (Rs.1, 17,497 crore in 2011-12, 57.91 per cent of the total premium underwritten) As on 31st March, 2013, the accumulated total amount of investments held by the insurance sector was Rs.18, 67,886 crore. During the year the insurance sector’s assets under management (AUM) have grown 11.15 per cent from Rs.16, 80,527 crore as on 31st March, 2012. Life insurers continue to contribute a major share of total investments held by the industry with the AUM of 93.42 per cent of total investments. During the financial year 2012-13, the life insurance industry reported net profit of Rs.6948 crore as against Rs.5974 crore in 2011-12. Out of the twenty four life insurers in operations during 2012-13, seventeen companies reported profits. During the year 2012-13, the total net profit of non-life insurance industry was Rs.3, 282 crore as against a profit of Rs.25 crore in 2011-12. The public sector companies reported net profit of Rs.2, 603 crore whereas
  37. 37. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 37 private sector insurers reported net profit of Rs.679 crore. All the four public sector insurers reported net profits during the year 2012-13. Life Insurance Council, the industry body of life insurers in the country, has projected a compounded annual growth rate (CAGR) of 12–15 per cent over the next five years for the segment. India’s insurable population is expected to grow to 750 million by 2020, with life expectancy projected to reach 74 years around the same period. The council believes that this favorable Indian demography would result in more people seeking out life insurance. Also, the council predicts life insurance penetration – percentage of insurance premium to GDP – to reach 5 per cent by 2020 from its current 3.2 per cent. Confederation of Indian Industry (CII) projects the growth rate for India’s insurance industry in FY 2013–14 to be around 5 per cent. It also anticipates 60 per cent of non-life insurance companies to record an average growth of more than 10 per cent. The raising of the foreign direct investment (FDI) limit from 26 per cent to 49 per cent in the sector is viewed as a key element to promote the insurance industry in India. 3.5 A BRIEF HISTORY OF THE INSURANCE SECTOR The business of life insurance in India in its existing form started in India in the year 1818 with the establishments of the Oriental Life Insurance Company in Calcutta. Some of the important milestone in the life insurance business in India is: • 1912: The Life Assurance Companies Act enacted as the first statue to regulate the life insurance business. • 1928: The Indian insurance companies act enacted to enable the government to collect statistical information about both life and non life insurance businesses. • 1938: Earlier legislation consolidated and amended to by the insurance act with the objective of protecting the interests of the insuring public.
  38. 38. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 38 • 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized .LIC formed by an act of parliament, viz LIC Act, 1956, with a capital contribution of Rs 5 crore from the government of India. • The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd the first general insurance company established in the year 1850 in Calcutta by the British. 3.5.1 General insurance business in India is • 1907: The Indian Mercantile Insurance Ltd set up the first company to transact all classes of general insurance business. • 1957: General Insurance Council, a wing of the insurance Association pf India, frames a code of the conduct for ensuring fair conduct and sound business practices. • 1968: The Insurance Act amended to regulate investments and set minimum solvency. 3.5.2 Margins and the Tariff Advisory Committee set up • 1972: The general insurance Business Act nationalized the general insurance business in India with effect from 1st January 1973.107 insurers amalgamated and grouped into four companies viz the national insurance company Ltd ,the New India Assurance Company Ltd ,the Oriental Insurance Company Ltd and the United India Insurance Company Ltd .GIC incorporated as a company.
  39. 39. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 39 3.6 INSURANCE SECTOR REFORMS In 1993 Malhotra committee headed by former finance secretary and RBI governor R. N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at “creating the reforms more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance to address the need for similar reforms”. In 1994 the committee submitted the report and some of the key recommendations included. 1. Structure Government stake in the insurance companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. 2. Competition • Private companies with a minimum paid up capital of Rs 1 Bn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity. • Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. • Postal Life Insurance should be allowed to operate in the rural market • Only on state level Life Insurance Company should be allowed to operate in each state. 3. Regulatory Body • The Insurance Act should be changed. • An Insurance Regulatory body should be set up. • Controller of insurance (currently a part from the finance ministry) should be made independent.
  40. 40. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 40 4. Investments • Mandatory Investments of LIC Fund in government securities to be reduced from 75% to 50%. • GIC and its subsidiaries are not to hold more than 5 % in any company (there current holdings to be brought down to this level over a period of time). 5. Customer service • LIC should pay interest on delays in payments beyond 30 days. • Computerization of operations and updating of technology to be carried out in the insurance industry. The committee emphasized that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. • But at the same time the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. Hence, it was decided to allow competition in a limited way by stipulating the minimum capital requirements of Rs 100 crores. • The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. 3.7 BANK AND INSURANCE Bank assurance symbolizes the convergence of banking and insurance has its origins in France and involves distribution of insurance products through a bank’s branch network. While banc assurance has developed into a tremendous success story in Europe, it is a relatively new concept in Australia and Asia. Most new insurers have entered into memoranda of understanding with banks to use their branches as outlets for marketing standard products. State Bank of India, vysya Bank and J&K Bank already have joint ventures in life insurance. Vijaya Bank and Punjab National Bank are in the midst of finalizing life and non-life ventures. The Insurance Act allows only those companies registered under the companies Act to become corporate agents. This gives the new generation and old private sector banks a head start over public sector banks, which are technically not eligible to sell risk products.
  41. 41. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 41 IRDA, IBA&RBI are in discussions to iron out the various issues, as public sector banks will play a key role in the distribution of products. 3.8 ROLE OF INSURANCE IN ECONOMIC DEVELOPMENT For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channeled into investments foe economic growth. All good life insurance companies have huge funds, accumulated through the payments of small amount of premium of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. All good life insurance companies have huge funds, accumulated through the payments of small amount of premia of individuals. These funds are invested in ways that contribute substantially for the economic development of the countries in which they do business. The private insurers in India are new and had not built up funds in 2002. But, in course of time, they also would be directly and indirectly contributing to the country’s economic development. A life insurance company will have large funds. These amounts are collected by way of premiums. Every premium represents a risk that is covered by that premium. In effect, therefore, these vast amounts represent pooling of risks. The funds are collected and held in trust for the benefit of the policyholders. The management of life insurance companies is required to keep this aspect in mind and make all its decisions in ways that benefit the community. This applies also to its investments. That is why successful insurance companies would not be found investing in speculative ventures. Apart from investments, business and trade benefit through insurance. Without insurance, trade and commerce will find it difficult to face the impact of major perils like fire, earthquake, floods, etc. Financiers, like banks, would collapse if the factory, financed by it, is reduced to ashes by a terrible fire. Insurers cover also the loss to financiers, if their debtors default.
  42. 42. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 42 3.9 INSURANCE REGULATIORY AND DEVEVLOPMENT AUTHORITY (IRDA):- The opening of insurance sector has been long standing and development authority-IRDA bill a significant step has been taken. IRDA is formed as an authority to protect the interest of holders of insurance policies, to regulate, promote and ensure orderly growth of insurance industry and for matters connected there with incidental thereto. 3.9.1 Composition of authority under IRDA, Act, 1999 As per the section 4 of IRDA Act ‘1999, insurance Regulatory and development Authority (IRDA, which was constituted by an act of parliament) specify the composition of authority. The authority is ten-member team consisting of, 1) A chairman 2) 5 whole team members 3) 4 part time members 3.9.2 Duties, powers and functions of IRDA Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. 1) Subject to the provisions of this act and any other law for the time being in force, the authority shall have the duty to regulate, promote ensure orderly growth of the insurance business and re- insurance business. 2) Without prejudice to the generality of the provisions contained in sub-section (1) the power and functions of the authority shall include
  43. 43. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 43 a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration. b) Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interests, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance. c) Specifying requisite qualification, code of conduct and practical training for intermediary or insurance intermediaries and agent. d) Specifying the code of conduct for surveyors and loss assessors. e) Promoting efficiency in the conduct of insurance business f) Promoting and regulating professional organizations connected with the insurance. g) Levying fees and other charges for carrying out the purposes of this Act. h) Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business. i) Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the tariff advisory committee under section 64u of the insurance Act, 1938(4 of 1938). h) Specifying the form and manner in which books of account shall be maintained and insurers and other insurance intermediaries shall render statement of accounts. j) Regulating maintenance of margin of solvency. k) Adjudication of disputes between insurers and intermediaries or insurance intermediaries. l) Supervising the functioning of the Tariff Advisory Committee. m) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f).
  44. 44. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 44 o) Specifying the percentage of life insurance business and general insurance business to be understood by the insurer in the rural or social sector. 3.10 LIFE INSURERS TABLE 3.2 S.No NAME OF THE COMPANY NAME OF PRINCIPAL OFFICER NAME OF APPOINTED ACTUARY TELEPHONE NO./FAX No./E- MAIL & WEB ADDRESS 1. Bajaj Allianz Life Insurance Company Limited . GE Plaza, Airport Road , YerawadaPune 411 006 Mr Anuj Agarwal Dhulipala SAISRINIVAS Tel : 020-66026777 Fax : 020 -66026789 2. Birla Sun Life Insurance Co. Ltd Reg. Office: One India Bulls Centre, Tower 1, 16th Floor, Jupiter Mill Compound, 841 , Senapati Bapat Marg, Elphinstone Road, Mumbai-400013. Mr Pankaj Razdan MD & CEO ANIL KUMAR SINGH Tel: +91 22 67239100 Email: pankaj.razdan@adityabir la.com Toll-free:1-800-270-7000 Email :customerservice@birlasunlife.c om 3. HDFC Standard Life Insurance Co. Ltd 19th Floor, Lodha Excelus, Apollo Mills Compound, N.M. Joshi Road, Mahalaxmi, Mumbai - 400 011 Mr. Amitabh Chaudhry Mr. Srinivasan Parthasarathy Tel : 022-67516666 4. ICICI Prudential Life Insurance Co. Ltd ICICIPrulifeTowers , 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025. Mr. Sandeep Bakhshi SATYAN JAMBUNATHAN Telephone no. : (022) 40391600 Fax no.: (022) 66622031 5. ING Vysya Life Insurance Company Ltd. ING Vysya Home, 5th Floor, #22 Mahatma gandhi Mr.Kshitij Jain Mr.B.N.Rangaraja n Tel : 080-25328000 Fax: 080-25559764
  45. 45. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 45 RoadBangalore-560 001. 6. Life Insurance Corporation of IndiaYogakshema, Jeeva Bima Marg, Post Box No. 19953 MUMBAI 400 021 Mr. S.K. Roy P K ARORA Tel : 022- 66598000 7. Max Life Insurance Co. Ltd 11th Floor, DLF Square , Jacaranda Marg, DLFCity , Phase-II, GURGAON 122 002. Shri Rajesh Sud Mr. Sanchit Maini Tel : 0124-2561717 Fax: 0124-2561764 8. PNB Metlife India Insurance Co. Ltd. Brigade Seshamahal, No. 5, Vani Vilas Road , Basavanagudi, BANGA LORE-560 004. Mr Tarun Chugh MD & CEO P.K.Dinakar Tel : 080-26438638 Fax: 080-26521970 Toll Free No. 1800-425-6969 tchugh@pnbmetlife.com, 9. Kotak Mahindra Old Mutual Life Insurance Limited 4th Floor, Vinay Bhavya Complex, 159 A, CST Road, Kalina, Santacruz (East), Mumbai: 400098 Mr. G. Murlidhar Mr. Sunil Sharma Tel : 022-66057777 Fax:022-67425649/50 10. SBI Life Insurance Co. Ltd Natraj, M.V.Road & Western Express Highway Junction, Andheri (East), Mumbai-400069 Mr. Atanu Sen Mr. Sanjeev Kumar Pujari Tel : 022-61910011 Fax: 022-56621471 11. Tata AIA Life Insurance Company Limited 14th Floor, TOWER – A, Peninsula Business Park Senapati Bapat Marg Mumbai 400013 Mr. M. Suresh Mr. Heerak Basu Tel :022-66479000 Fax : 022-66550711 12 Reliance Life Insurance Company Limited. 9th floor & 10th floor, Building No. 2, R-Tech Park, Nirlon Compound, Next to Hub Mall, Behind I - Flex Building, Goregaon (East), Mumbai - 400 063 Mr. Anup Rau Velamuri RAJESH DALMIA Tel : 022-30883434/ 30887261 Fax: 022-30886587
  46. 46. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 46 13 Aviva Life Insurance Company India Limited AvivaTower, Sector Road, Opposit Golf Course, DLF-Phase V, Sector-43, Gurgaon - 122 003 Mr. T. R. Ramachandran Mr. Sanjeeb Kumar Tel: 0124-270 9000/01, Fax: 0124-270 9007. 14 Sahara India Life Insurance Co, Ltd. #1, SaharaIndia Bhawan, Kopoorthala Complex, Lucknow 226024 Mr Sanjay Agarwal, MD & CEO Mr. Pravir Chandra Tel: 0522-2329568 Fax: 0522-2332683 E-mail - sanjay.agarwal@life.sahara.co.i n 15 Shriram Life Insurance Co, Ltd. Ramky Selenium, Plot No 31 & 32 Beside Andhra Bank Training Centre, Financial District, Gachibowli, Hyderabad – 500032 Mr Manoj Kumar Jain Mr. Nelius Bezuidenhout Board : +91 40 23009400 16 Bharti AXA Life Insurance Company Ltd. 601-602 6th Floor, Raheja Titanium Off Western Express Highway Goregaon (E) Mumbai – 400 063 Mr. Sandeep Ghosh Mr. Rajeev Kumar Tel: 022 – 40306300/6301 Fax: 022 - 40306347 17 Future Generali India Life Insurance Company Limited 6th Floor, Tower - 3, Indiabulls Finance Centre, Senapati Bapat Marg, Eliphinstone Road(W), Mumbai - 400013. Mr Munish Sharda MD & CEO MAMATA PANDEY Tel No.: 022-40976802 Fax No.: 022-40976600 munish.sharda@futuregenerali.i n 18 IDBI Federal Life Insurance Company Ltd., Tradeview, 1st Floor, Oasis Complex, Kamala City, P.B. Marg, Lower Panel (W), Mumbai-400 013 Mr Vighnesh Sahane CEO (Officiating) MS. RUCHI GOEL Tel No.: 022- 66552836 Email: vighnesh.shahane@idbifederal.c om 19 Canara HSBC Oriental Bank of Commerce Life Insurance Mr. John David Holden, Mr. Chirag Shamji Rathod Tel: 0124 4535500 Fax: 0124 4535999
  47. 47. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 47 Company Ltd. Augusta Point, 2nd Floor, DLF Golf Course Road, Sector-53, Gurgaon-Haryana (INDIA) 122002 CEO & WTD 20 AEGON Religare Life Insurance Company Limited. Building No 3, Third floor, Unit No.1 Nesco IT Park, Western Express Highway, Goregaon(E) Mumbai - 400063 Mr K S Gopalakrishnan Patrick Curtin Tele No.-022 61180100 Fax No.- 022 67293333 Email: ks.gopalakrishnan@aego nreligare.com 21 DHFL Pramerica Life Insurance Co. Ltd. 4th Floor Tower B, Building No.-9, DLFCyberCity, Phase-III, Gurgaon-122002. Mr Anoop Kumar Pabby (MD & CEO) Mr. Pradeep Kumar Thapliyal Ph. No.- +91 124 4697000(Board) Fax No.- 0124-4697100 / 200 anoop.pabby@dhflpramerica.co m 22 Star Union Dai-ichi Life Insurance Co. Ltd., Star House, 3rd Floor, (West Wing), C-5,Bandra-Kurla Complex, Bandra (East), Mumbai 400 051 Mr. Girish Pandurang Kulkarni (MD & CEO) Mr. I SAMBASIVA RAO Phone: 022-39546211 e-mail: ceo@sudlife.in 23 IndiaFirst Life Insurance Company Limited 301, 'B' Wing, The Qube, Infinity Park, Dindoshi - Film City Road, Malad (East), Mumbai - 400 097. Dr. P. Nandagopal Mr. Chandan Kumar Khasnobis Phone: 022 39418700 Fax: 022 33259500 24 Edelweiss Tokio Life Insurance Co. Ltd. Edelweiss House, off C.S.T. Road, Kalina, Mumbai : 400 098 Mr. Deepak Mittal Mr. Abhay Tewari Tel No: 022 40636015 Fax No: 022 43428161
  48. 48. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 48 3.13 LIST OF SOME LIFE INSURANCE COMPANIES WORKS IN INDIA 3.13.1 Birla Sun Life Insurance Company: Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known Indian conglomerate and Sun Life Financial Inc, one of the leading international financial services organizations from Canada. With an experience of over a decade, BSLI has contributed to the growth and development of the Indian life insurance industry and currently is one of the leading life insurance companies in the country. Foreign Partner: Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Sun Life Financial and its partners have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2013, the Sun Life Financial group of companies had total assets under management of $591 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF. 3.13.2 HDFC- Standard Life: HDFC Standard Life Insurance Company is a joint venture between India’s largest housing finance provider, HDFC and Europe’s largest mutual life assurance company –The Standard Life Assurance Company. HDFC Standard Life Insurance Company Limited is the First Private Sector Life Insurance Company to be granted license. HDFC Life continues to have one of the widest reaches among new insurance companies with about 500 branches in India touching customers in over 900 cities and towns. The company has also established a liaison office in Dubai. HDFC Life has a strong presence in its existing markets with a strong base of Financial Consultants.
  49. 49. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 49 Foreign Partner: Established in 1825, Standard Life plc. is a leading provider of long term savings and investments to around six million customers worldwide. Headquartered in Edinburgh, Standard Life plc. has around 8,500 employees internationally. The Standard Life plc. group includes savings and investments businesses, which operate across the UK, Canada, Europe, Asia and Middle East; workplace pensions and benefits businesses in the UK and Canada; Standard Life Investments, a global investment manager, which manages over £179bn globally; and its Chinese and Indian Joint Venture businesses. At the end of September 2013 the Group had total assets under administration of over £237bn. It is one of the very few insurance companies in the world to have received ‘AAA’ rating from two of the leading international credit rating agencies. Standard Life plc is listed on the London Stock Exchange and has approximately 1.5 million individual shareholders in over 50 countries around the world. It is also listed in the Dow Jones Sustainability World Index, ranking it among the top 10% of sustainable companies in the world. 3.13.3 Life Insurance Corporation of India (LIC): Life Insurance Corporation of India (LIC) is an Indian state-owned insurance group and investment company headquartered in Mumbai. The Life Insurance Corporation of India was established about 44 years ago with a view to provide an insurance cover against various risks in life. A monolith then, the corporation, enjoyed a monopoly status and became synonymous with life insurance. It is the largest insurance company in India with an estimated asset value of 1560481.84 crore (US$260 billion}). As of 2013 it had total life fund of Rs.1433103.14 crore with total value of policies sold of 367.82 lakh that year. It’s main asset is its staff strength of 119,767 lakh employees (As on 31 March 2012) and 2,048 branches and over 6 lakh agency force .LIC has hundred divisional offices and has established extensive training facilities at all levels. At the apex, is the Management Development Institute, seven Zonal Training Centers and 35 sales Training Centers .At the industry level, along with the government and the GIC, has helped establish the national insurance academy.
  50. 50. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 50 It presently transacts individual life insurance businesses, group insurance businesses, social security schemes and pensions, grants housing loans through its subsidiary; and markets savings and investment products through its mutual fund .Its pays off about Rs 6,000 crore annually to 5.6million policyholders. 3.13.4 Kotak Mahindra Life Insurance: Kotak Mahindra Old Mutual Life Insurance Ltd is a 74:26 joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual plc. The company started operations in 2001, and strives to offer its customers outstanding value through high customer empathy, consistent and benchmarked service and a suite of products that leverage the combined prowess of protection and long term savings. The company covers over 4 million lives and is one of the fastest growing insurance companies in India. Foreign Partner: Old Mutual provides life assurance, asset management, banking and general insurance to more than 14 million customers in Africa, the Americas, Asia and Europe. Originating in South Africa in 1845, Old Mutual has been listed on the London and Johannesburg Stock Exchanges, among others, since 1999. In the year ended 31 December 2012, the Group reported adjusted operating profit before tax of £1.6 billion (on an IFRS basis) and had £262 billion of funds under management from core operations. 3.13.4 Max Life insurance: Max Life Insurance, one of the leading life insurers, is a joint venture between Max India Ltd. and Mitsui Sumitomo Insurance Co. Ltd. Max India is a leading Indian multi-business corporate, while Mitsui Sumitomo Insurance is a member of MS&AD Insurance Group, which is amongst the top general insurers in the world. Max Life Insurance offers comprehensive life insurance and retirement solutions for long-term savings and protection to thirty lakh customers. It has a country-wide diversified distribution model including the country's leading agent advisors, exclusive arrangement with Axis Bank and several other partners. Max Life Insurance is a quality business focused on delivering excellence to customers through advice based sale
  51. 51. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 51 process, customer centric approach to business, financial stability & investment expertise and strong human capital. In the financial year 2012-13 Max Life Insurance ranked fourth among private life insurers with a market share of 8.5%. The Company has been one of the fastest growing life insurance companies with total revenue of Rs. 6,639 crore and enterprise profit before tax of Rs. 860crore for the Financial Year 2012-13. The Company’s share capital of Rs. 2,127 crore with a solvency margin of 521% is indicative of its financial strength and stability. As on 31st March 2013, Max Life Insurance had assets under management of Rs. 20,458 crore. Foreign Partner: Mitsui Sumitomo Insurance Co., Ltd. (MSI) is a member of MS&AD Insurance Group that was formed in April 2010 from the business integration of the Mitsui Sumitomo Insurance Group Holdings, Inc. (MSIG), Aioi Insurance Co., Ltd. (Aioi) and Nissay Dowa General Insurance Co., Ltd. (NDI) under the holding company MS&AD Insurance Group Holdings, Inc. (MS&AD Holdings). Headquartered in Tokyo, Japan, MS&AD Insurance Group has a presence in 39 markets globally. In FY 2012-13, it reported a Total Assets of 15,914 billion yen (US$159 billion) and a Consolidated Net Premium of 2,639 billion yen (US$ 26.4 billion). 3.13.5 Aviva Life Insurance India: It is joint venture between Dabur, one of India ‘s oldest and largest groups of companies and Aviva. Aviva plc is UK’s largest insurer .In accordance with government regulations, Aviva holds a 26% stake in the new venture and Dabur holds a 74%share. In India, with a wide distribution network of 134 branches spreading across nearly 1,000 towns and cities, we operate in partnership with the Dabur Group. Foreign Partner: It is the world’s seventh –largest insurance group (based on gross worldwide premiums) and the biggest in the UK . It is one of the leading providers of life and pensions products to
  52. 52. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 52 Europe and has substantial businesses elsewhere around the world .Its main activities are long term savings, fund management and general insurance. Aviva is UK’s largest and the world’s tenth largest insurance Group(based on asstes hold). It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 30 million-customer base worldwide. It has more than £317 billion of assets under management. 3.13.6 ING Vysya Life Insurance: ING Vysya Life Insurance Company Limited is an established life insurance company with over a decade of experience serving over 1 million customers in over 200 cities in India. Headquartered in Bangalore, ING Vysya Life Insurance Company Limited is 100% owned by Exide Industries Limited. The company distributes its products through key channels like Tied Agency, Banc assurance and Alliances. The Tied Agency channel comprises over 30,000 ING Vysya Life Insurance Advisors, spread across the country. The Banc assurance and Alliances business within ING Vysya Life Insurance is a fast growing distribution channel, and includes the Banc assurance partner (ING Vysya Bank), Referral Partners, Corporate Agents and Brokers. Foreign Partner: Exide Industries Ltd - With eight manufacturing plants strategically located across the country, Exide is India's largest producer of automotive and industrial batteries. Its range of products covers everything from the smallest batteries required in motorcycles to the giant batteries powering submarines. It is the market leader in the organised sector in both the automotive and industrial segments. 'EXIDE' and 'SF (Standard Furukawa)', the flagship brands of the Company, are also the leading battery brands in the country.
  53. 53. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 53 3.13.8 PNB Met Life Insurance : PNB MetLife India Insurance Company Limited (PNB MetLife) is a joint venture between MetLife International Holdings Inc. (MIHI), Punjab National Bank Limited (PNB), Jammu & Kashmir Bank Limited (JKB), M. Pallonji and Company Private Limited and other private investors, with MIHI and PNB being the majority shareholders. PNB MetLife was previously known as MetLife India Insurance Company Limited (MetLife India) and has been present in India since 2001. PNB MetLife is present in over 150 locations across the country and serves customers in more than 7,000 locations through its bank partnerships with PNB, JKB and Karnataka Bank Limited. Met Life: It ranked 38 on the fortune 500 list, Met Life, Inc is one of the worlds largest, strongest and most respected financial organizations .Met Life, through its affiliates, is the number 1 life insurer in the US with approximately $2.4 trillion of life insurance in force and has been delivering reliable serve approximately 12 million individuals in the US as well as the employees of 88 of the fortune 100 companies. Headquartered in New York, Met Life operates through its affiliates and subsidiaries in 12 countries across the Americas, Europe and Asia. 3.13.9 Allianz Bajaj Life Insurance Company Bajaj Allianz is a joint venture between Bajaj Finserv Limited and Allianz SE. Both enjoy a reputation of expertise, stability and strength. This joint venture Company incorporates global expertise with local experience. Bajaj Auto, one of the biggest 2 and 3 wheeler manufacturers in the world. The comprehensive, innovative solutions combine the technical expertise and experience of Allianz SE, and in-depth market knowledge and goodwill of "Bajaj" brand in India. Competitive pricing and quick honest response have earned the Company the customer's trust and market leadership in a very short time. Foreign Partner: I t is one of the world’s leading insurers and financial service providers. Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost 174,000 employees. At the top
  54. 54. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 54 of the international group is the holding company, Allianz AG, with its head office in Munich. Allianz group provides its more than 60 million customers. 3.13.10 SBI Life Insurance Company Ltd SBI Life Insurance Company Ltd is a joint venture between India’s largest banks, State Bank Of India & Cardiff S A, a leading life insurance company in France. State Bank of India is a household name, and it stands as the last word for financial strength and security in the country. SBI’s illustrations background dates back to the year 1806 when it started business, as a presidency bank, known as bank of Bengal Over the long journey, it has learnt to combine the best of banking practices handed down from the imperial management with the more dynamic ways of doing banking in the modern India. It has grown as a responsible giant in the banking field over the years. 3.13.11 Tata AIA Life Insurance Company Limited Tata AIA Life Insurance Company Limited (Tata AIA Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIA Life combines Tata’s pre- eminent leadership position in India and AIA’s presence as the largest, independent listed pan- Asia life insurance group in the world spanning 17 markets in Asia Pacific. Tata Sons holds a majority stake (74 per cent) in the company and AIA holds 26 per cent through an AIA Group company. Tata AIA Life Insurance Company. Foreign Partner: AIA Group Limited and its subsidiaries (collectively "AIA" or "the Group") comprise the largest independent publicly listed pan-Asian life insurance group. It has operations in 17 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, a 97 per cent subsidiary in Sri Lanka, a 26 per cent joint venture in India and a representative office in Myanmar. It had total assets of US$147 billion as of 31 May 2013.
  55. 55. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 55 3.14 THE MARKET SHARE OF LIFE INSURANCE COMPANIES Apr 20
  56. 56. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 56 3.15 STATE BANK OF INDIA LIFE INSURANCE SBI LIFE – a joint venture between 74% 26% SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life Insurance is registered with an authorized capital of Rs 2000 core and a paid up capital of Rs 1000 carore. SBI owns 74% of the total capital and Cardiff the remaining 26% State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 19,000 branches across the country, the largest in the world. Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone’s leading Bank. BNP is one of the oldest foreign banks with a presence in India dating back to 1860. It has 9 branches in the metros and other major towns in the country. Cardif is a vibrant insurance company specializing in personal lines such as long-term savings, protection products and creditor insurance. Cardif has also been a pioneer in the art of selling insurance products through commercial banks in France and 80 more countries.SBI Life Insurance’s mission is to emerge as the leading company offering a comprehensive range of Life Insurance and pension products at competitive prices, ensuring high standards of customer service and world class operating efficiency. The company plans to make the insurance buying process quick, simple and based on well-informed judgment. In 2004, SBI Life Insurance became the first company amongst private insurance players to cover 30 lacks lives. The company expects to carve a niche in the Indian insurance market through extensive product innovation and aims to provide the highest standards of customer service through a technological interface. To facilitate this, call centers have been already installed and help lines will be installed and customers will have access to their accounts through the Internet or through SBI branches. The company proposes to
  57. 57. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 57 make available ready liquidity to its Life Insurance policies by way of loans at SBI counters. This will make Life Insurance a liquid asset in the financial portfolio of households. SBI Life Insurance is uniquely placed as a pioneer to usher bank assurance into India. The company hopes to extensively utilize the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans, personal loans and credit cards. SBI’s access to over 100 million accounts provides a vibrant base to build insurance selling across every region and economic strata in the country. 3.15.1 Group Corporate SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI’s access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country ensuring true financial inclusion. 3.16 MANAGEMENT PHILOSOPHY 3.16.1 Mission “To emerge as the leading company offering a comprehensive range of life insurance and pension products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalization period.” 3.16.2 Values  Trustworthiness • Dynamism  Excellence • Innovation  Ambition
  58. 58. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 58 3.17 BOARD MEMBERS The composition of the Board of Directors as on March 31, 2013 is as under: TABLE 3.3 SR. No. Name of the Director Designation Category 1 Mr. Pratip Chaudhuri Chairman Non–Executive Director / Non-Independent Director 2 Mr. A. Krishna Kumar Director Non–Executive Director / Non-Independent Director 3 Mr. Atanu Sen MD & CEO Executive Director / Non-Independent Director 4 Mr. Eric Lombard Director Non–Executive Director / Non-Independent Director 5 Mr. Gerard Binet Director Non–Executive Director / Non-Independent Director 6 Mr. Nilesh Vikamsey Director Non–Executive Director / Independent Director 7 Mr. Ravi Rambabu Director Non–Executive Director / Independent Director 8 Mr. K. M. Bhattacharya Director Non–Executive Director / Independent Director 9 Mr. Raj Narain Bhardwaj Director Non–Executive Director / Independent Director
  59. 59. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 59 3.18 KEY MILESTONES Financial Year 11-12:  Awarded the most coveted NDTV Profit Business Leadership Award, twice in a row, 2010 & 2011.  Awarded ‘Most Trusted Life Insurance Brand - II By The Economic Times, Brand Equity and Nielsen, Most Trusted Brands 2011.  Globally topped the prestigious Million Dollar Round Table (MDRT) for having the maximum number of MDRT members, for three years consecutively.  CRISIL reaffirmed its AAA / Stable rating to SBI Life, indicating highest financial strength to meet policyholder obligations.  ICRA reaffirmed its iAAA rating indicating highest claims paying ability and a fundamentally strong position.  Won one of the most prestigious quality distinction, IMC Ramkrishna Bajaj National Quality Awards 2011- "Certificate of Merit"  Awarded Silver Shield by ICAI for Excellence in Financial Reporting for FY 2010 – 11 under the Insurance category.  Won ’Best Presented Accounts Award‘ by The South Asian Federation of Accountants (SAFA), in the Insurance Category for the Annual Report FY 2009-10. Financial Year 10-11:  SBI Life won the coveted Bloomberg UTV Financial Leadership Award 2011 - "Life Insurer of the year".  Won the most coveted NDTV Profit Business Leadership Award 2010.  Globally topped the prestigious Million Dollar Round Table (MDRT) 2010 for having the maximum number of MDRT members.  Awarded the Gold Shield by Institute of Chartered Accountants of India (ICAI) for Excellence in Financial Reporting.  Won the ‘ICS Quality Champion Award 2010’ for Continual Quality Improvement.  Adjudged Best Life Insurer 2010 - Runner Up by Outlook Money.  Launched an innovative customer care initiative - SMS ‘SOLVE’ for prompt Grievance
  60. 60. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 60 Redressal.  Appraised at Maturity level 3 of Capability Maturity Model Integration (CMMI) Version 1.2 for its ISG Division.  ICRA reaffirmed ’iAAA’ rating to SBI Life, indicating highest claims paying ability and meeting policyholders obligations.  CRISIL, country’s leading rating agency, reaffirmed its highest financial rating AAA/Stable to SBI Life. Financial Year 09-10:  Reported a robust Net Profit of Rs.276 Crores.  Crossed Rs.10, 000 Crores in Gross Written Premium (GWP).  Assets under Management (AUM) grew by 96% to Rs.28, 551 Crores.  Globally topped the prestigious MDRT 2009 for having Maximum number of MDRT Members.  ICRA reaffirmed iAAA rating to SBI Life indicating highest claims paying ability.  Awarded ISO Certification (ISO/IEC 27001:2005) for Information Security Management System (ISMS).  Retained ISO 9001:2000 certificate for superior claim settlement process. Financial Year 08-09:  Ranked among global top three in terms of number of Million Dollar Round Table (MDRT) members  Bagged the coveted personal finance award-Outlook Money NDTV Profit "Best Life Insurer 2008".  CRISIL, country’s leading rating agency, reaffirmed its highest financial rating AAA/Stable to SBI Life. In 2007, SBI Life became the first life insurer in India to receive this rating from CRISIL.  ICRA assigned iAAA rating indicating highest claims paying ability to SBI Life Insurance.  Retained ISO 9001:2000 certificate for superior claim settlement process
  61. 61. Consumer Perception on Life Insurance DOS IN COMMERCE, MANASAGANGOTRI, MYSORE 2013-2014 Page 61 Financial Year 07-08:  Ranked amongst global top five life insurance companies in the number of MDRT members.  Rated as the ’The Most Trusted Private Life Insurer’ according to a survey conducted by Brand Equity in association with AC Nielsen ORG-MARG and the Economic Times Intelligence Bureau.  Received the highest financial rating ’AAA’ from CRISIL.  Forayed into micro insurance with the launch of ’Grameen Shakti’ in Bhubaneshwar, Orissa for the economically underprivileged sections of society.  Received ISO 9001: 2000 certification for superior claim settlement process.  Received CMMI Level 3 certification for IT processes and software development capabilities. Financial Year 06-07:  Second consecutive year of Profitability  More than 6.40 Million lives covered Financial Year 05-06:  Reported a robust net profit of Rs. 2.02 Cr

×