Project on reliance life insurance


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An organization study on Reliance life insurance
(With specific reference to customer satisfaction)

Submitted in partial fulfillment of the requirement of the
Bachelor of Business Management Degree
Offered by Jain University during the year 2012

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Project on reliance life insurance

  1. 1. Industry Profile In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra ) and Kautilya (Arthasastra ). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers‘ contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies— 1|Page
  2. 2. 245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century. It came to India as a legacy of British occupation. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the first company to transact all classes of general insurance business. 1957 saw the formation of the General Insurance Council, a wing of the Insurance Association of India. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. In 1968, the Insurance Act was amended to regulate investments and set minimum solvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the passing of the General Insurance Business (Nationalization) Act, general insurance business was nationalized with effect from 1 st January, 1973. 107 insurers were amalgamated and grouped into four companies, namely National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to complement the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein, among other things, it recommended that the private sector be permitted to enter the insurance industry. They stated that foreign companies be allowed to enter by floating Indian companies, preferably a joint venture with Indian partners. Following the recommendations of the Malhotra Committee report, in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. 2|Page
  3. 3. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders‘ interests. In December, 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Together with banking services, insurance services add about 7% to the country‘s GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long- term funds for infrastructure development at the same time strengthening the risk taking ability of the country. 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 is a financial device to spread the risks and losses of few people among a large number of people, as people prefer small fixed liability instead of begun certain and changing liability. 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 insured pays in exchange a fixed sum known as premium. Insurance is desired to safeguard oneself and one‘s family against possible losses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events. 3|Page
  4. 4. There are three parties in a life insurance transaction: the insurer, the insured, and the owner of the policy (policyholder), although the owner and the insured are often the same person. Another important person involved in a life insurance policy is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. Life insurance may be divided into two basic classes – term and permanent. Term life insurance provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Permanent life insurance is life insurance that remains in force until the policy matures, unless the owner fails to pay the premium when due. Importance of Insurance Insurance constitutes one of the major segments of the financial market. Insurance services play predominant role in the process of financial intermediary. Today insurance industry is one of the most growing sectors in India. There is lot of potential in the Indian Insurance Industry. There are many issues, which require study. The scope of the study of insurance industry of India would be very great as there are ongoing developments in the industry after the opening of the sector. The major issue right now is the hike in FDI (Foreign Direct Investment) limit from 26% to 49% in the insurance sector. Government may in near future allow 49% FDI in Insurance. This would lead to more capital inflow by foreign partners. Another major issue is the effects on LIC after the entry of private players in the market. Though market share of LIC has been affected, it has improved in terms of efficiency. There are number of other hot topics like penetration of Health Insurance, Rural marketing of insurance, new distribution channels, new product ranges, insurance brokers‘ regulation, incentive scheme of development officers of LIC etc. So it offers lot of scope for studying the insurance industry. Right now the insurance industry has great opportunities in a country like India or China which huge population. Also the penetration of insurance in India is very low in both Life and non-Life segments So there is lot potential to be trapped. 4|Page
  5. 5. About Marketing Marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." For business to consumer marketing, it is "the process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return". For business to business marketing it is creating value, solutions, and relationships either short term or long term with a company or brand. It generates the strategy that underlies sales techniques, business communication, and business developments. It is an integrated process through which companies build strong customer relationships and create value for their customers and for themselves. Marketing is used to identify the customer, satisfy the customer, and keep the customer. With the customer as the focus of its activities, marketing management is one of the major components of business management. Marketing evolved to meet the stasis in developing new markets caused by mature markets and overcapacities in the last 2-3 centuries. The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable. The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. The term developed from an original meaning which referred literally to going to a market to buy or sell goods or services. Seen from a systems point of view, sales process engineering marketing is "a set of processes that are interconnected and interdependent with other functions, whose methods can be improved using a variety of relatively new approaches." Evolution of Marketing An orientation, in the marketing context, related to a perception or attitude a firm holds towards its product or service, essentially concerning consumers and endusers. Throughout history, marketing has changed considerably in conjunction with consumer tastes. Constant throughout, however, is that marketing is some form of communication aimed broadly at improving eventual sales. 5|Page
  6. 6. Marketing research Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm's marketing environment and attain information from suppliers. Marketing researchers use statistical methods such as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear regression, correlations, frequency distributions, Poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information. The marketing research process spans a number of stages, including the definition of a problem, development of a research plan, collection and interpretation of data and disseminating information formally in the form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research. Market segmentation Market segmentation pertains to the division of a market of consumers into persons with similar needs and wants. For instance, Kellogg's cereals, Frosties are marketed to children. Crunchy Nut Cornflakes are marketed to adults. Both goods denote two products which are marketed to two distinct groups of persons, both with similar needs, traits, and wants. Market segmentation allows for a better allocation of a firm's finite resources. A firm only possesses a certain amount of resources. Accordingly, it must make choices (and incur the related costs) in servicing specific groups of consumers. In this way, the diversified tastes of contemporary Western consumers can be served better. With growing diversity in the tastes of modern consumers, firms are taking note of the benefit of servicing a multiplicity of new markets. 6|Page
  7. 7. Market segmentation can be defined meaning Segment, Target and Position. in terms of the STP acronym, Types of Market Research Market research, as a sub-set aspect of marketing activities, can be divided into the following parts:   Primary research (also known as field research), which involves the conduction and compilation of research for a specific purpose. Secondary research (also referred to as desk research), initially conducted for one purpose, but often used to support another purpose or end goal. By these definitions, an example of primary research would be market research conducted into health foods, which is used solely to ascertain the needs/wants of the target market for health foods. Secondary research in this case would be research pertaining to health foods, but used by a firm wishing to develop an unrelated product. 7|Page
  8. 8. Customer Satisfaction Defining customer satisfaction Because the concept of customer satisfaction is new to many companies, it's important to be clear on exactly what's meant by the term. Customer satisfaction is the state of mind that customers have about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. There are some important implications of this definition:  Because customer satisfaction is a subjective, non quantitative state, measurement won't be exact and will require sampling and statistical analysis.  Customer satisfaction measurement must be undertaken with an understanding of the gap between customer expectations and attribute performance perceptions.  There should be some connection between customer satisfaction measurement and bottom-line results. 8|Page
  9. 9. "Satisfaction" itself can refer to a number of different facts of the relationship with a customer. For example, it can refer to any or all of the following:     Satisfaction with the quality of a particular product or service Satisfaction with an ongoing business relationship Satisfaction with the price-performance ratio of a product or service Satisfaction because a product/service met or exceeded the customer's expectations Each industry could add to this list according to the nature of the business and the specific relationship with the customer. Customer satisfaction measurement variables will differ depending on what type of satisfaction is being researched. For example, manufacturers typically desire on-time delivery and adherence to specifications, so measures of satisfaction taken by suppliers should include these critical variables. Clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and serve as the basis for performance appraisal and reward systems. It can also serve as the basis for a customer satisfaction surveying program that can ensure that quality improvement efforts are properly focused on issues that are most important to the customer. Objectives of a customer satisfaction surveying program In addition to a clear statement defining customer satisfaction, any successful surveying program must have a clear set of objectives that, once met, will lead to improved performance. The most basic objectives that should be met by any surveying program include the following:  Understanding the expectations and requirements of all your customers  Determining how well your company and its competitors are satisfying these expectations and requirements 9|Page
  10. 10.  Developing service and/or product standards based on your findings  Examining trends over time in order to take action on a timely basis  Establishing priorities and standards to judge how well you've met these goals Before an appropriate customer satisfaction surveying program can be designed, the following basic questions must be clearly answered:  How will the information we gather be used?  How will this information allow us to take action inside the organization?  How should we use this information to keep our customers and find new ones? Careful consideration must be given to what the organization hopes to accomplish, how the results will be disseminated to various parts of the organization and how the information will be used. There is no point asking customers about a particular service or product if it won't or can't be changed regardless of the feedback. Conducting a customer satisfaction surveying program is a burden on the organization and its customers in terms of time and resources. There is no point in engaging in this work unless it has been thoughtfully designed so that only relevant and important information is gathered. This information must allow the organization to take direct action. Nothing is more frustrating than having information that indicates a problem exists but fails to isolate the specific cause. Having the purchasing department of a manufacturing firm rate the sales and service it received on its last order on a scale of 1 (terrible) to 7 (magnificent) would yield little about how to improve sales and service to the manufacturer. The lesson is twofold. First, general questions are often not that helpful in customer satisfaction measurement, at least not without many other more specific questions attached. Second, the design of an excellent customer satisfaction surveying program is more difficult than it might first appear. It requires more than just writing a few questions, designing a questionnaire, calling or mailing some customers, and then tallying the results. 10 | P a g e
  11. 11. Understanding differing customer attitudes The most basic objective of a customer satisfaction surveying program is to generate valid and consistent customer feedback (i.e., to receive the voice of the customer, which can then be used to initiate strategies that will retain customers and thus protect the most valuable corporate asset--loyal customers). As it's determined what needs to be measured and how the data relate to loyalty and repurchase, it becomes important to examine the mind-set of customers the instant they are required to make a pre-purchase (or repurchase) decision or a recommendation decision. Surveying these decisions leads to measures of customer loyalty. In general, the customer's pre-purchase mind-set will fall into one of three categories--rejection (will avoid purchasing if at all possible), acceptance (satisfied, but will shop for a better deal), and/or preference (delighted and may even purchase at a higher price). This highly subjective system that customers themselves apply to their decisions is based primarily on input from two sources:  The customers' own experiences--each time they experience a product or service, deciding whether that experience is great, neutral or terrible. These are known as "moments of truth."  The experiences of other customers--each time they hear something about a company, whether it's great, neutral or terrible. This is known as "word-ofmouth." There is obviously a strong connection between these two inputs. An exceptional experience leads to strong word-of-mouth recommendations. Strong recommendations influence the experience of the customer, and many successful companies have capitalized on that link. Obviously, the goal of every company should be to develop customers with a preference attitude (i.e., we all want the coveted preferred vendor status such that the customer, when given a choice, will choose our company), but it takes continuous customer experience management, which means customer satisfaction measurement, to get there--and even more effort to stay there. 11 | P a g e
  12. 12. About Reliance Life insurance Company Reliance Life Insurance Company Limited (Reliance Life Insurance) is a part of Reliance Capital Ltd. of the Reliance Anil Dhirubhai Ambani Group. Reliance Capital is one of India‘s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Nippon Life Insurance Company acquired 26% interest in equity share capital of the Company effective October 7, 2011 subsequent to receipt of all regulatory approval. Nippon Life Insurance, also called Nissay, is Japan's largest private life insurer with revenues of Rs 346,834 crore (US$ 80 Billion) and profits of over Rs 12,199 crore (US$ 3 billion). The Company has over 14 million policies in Japan, offers a wide range of products, including individual and group life and annuity policies through various distribution channels and mainly uses face-to-face sales channel for its traditional insurance products. The company primarily operated in Japan , North America, Europe and Asia and is headquartered in Osaka, Japan. It is ranked 81st in Global Fortune 500 firms in 2011. Established in 2001, Reliance Life insurance Company is a private insurance company; subsidiary of reliance capital ltd. Reliance life insurance is based in Mumbai and only the second company among private insurer to have 9001:2000 ISO certification. Reliance Life Insurance offers you products that fulfill your savings and protection needs. Our aim is to emerge as a transnational Life Insurer of global scale and standard. Reliance Life Insurance is a Reliance Capital Company and is part of Reliance Group. Reliance Capital is one of India‘s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. 12 | P a g e
  13. 13. Reliance Group also has presence in Communications, Energy, Natural Resources, Media, Entertainment, Healthcare and Infrastructure. Reliance Life Insurance has plenty of plans on the anvil. It has also 118 branches, with strong presence in South and a bouquet of products catering savings protection and investment need of individuals and corporate. The head-office of it is at Chennai. The company has already added 600 employees in addition to the 1000 plus staff of the erstwhile AMP Sanmar Life Insurance Company Limited. Reliance Life Insurance aims to be the consumer‘s preferred life insurer by understanding and meeting his needs. Think Bigger, Think Better! Distribution Network/ Branches: Reliance life insurance has a strong distribution system with around 1250 branches with 2, 00,000 advisors. Financial information The total premium earned for the half year ended September 30, 2010 was Rs 27,862 million. The profit after tax for the same period is Rs. 1634 million. A total of 4968 claims were made during the period out of which 3635 claims were settled and 374 cases were rejected. 13 | P a g e
  14. 14. Mission and visions Mission Create unmatched value for everyone through dependable, effective, transparent and profitable life insurance and pension plan. Vision Empowering everyone live their Dreams. Our Goal Reliance life insurance would strive hard to achieve three goals mentioned below: Emerge as transnational Life insurer of global scale standard. Create best value for customers, shareholders and all stake holders. Achieve impeccable reputation and credentials through best business practices. Key features of the life insurance 1) Nomination: When one makes a nomination, as the policyholder you continue to be the owner of the policy and the nominee does not have any right under the policy so long as you are alive. The nominee has only the right to receive the policy monies in case of your death within the term of the policy. 2) Assignment: If your intention is that your policy monies should go only to a particular person, you need to assign the policy in favor of that person. 3) Death Benefit: The primary feature of a life insurance policy is the death benefit it provides. Permanent policies provide a death benefit that is guaranteed for the life of the insured, provided the premiums have been paid and the policy has not been surrendered. 14 | P a g e
  15. 15. 4) Cash Value: The cash value of a permanent life insurance policy is accumulated throughout the life of the policy. It equals the amount a policy owner would receive, after any applicable surrender charges, if the policy were surrendered before the insured's death. 5) Dividends: Many life insurance companies issue life insurance policies that entitle the policy owner to share in the company's divisible surplus. 6) Paid-Up Additions: Dividends paid to a policy owner of a participating policy can be used innumerous ways, one of which is toward the purchase of additional coverage, called paid-up additions. 7) Policy Loans: Some life insurance policies allow a policy owner to apply for a loan against the value of their policy. Either a fixed or variable rate of interest is charged. This feature allows the policy owner an easily accessible loan in times of need or opportunity. 8) Conversion from Term to Permanent: When in need of temporary protection, individuals often purchase term life insurance. If one owns a term policy, sometimes a provision is available that will allow her to convert her policy to a permanent one without providing additional proof of insurability. Benefits of Life Insurance 1) Risk cover: Life Insurance contracts allow an individual to have a risk cover against any unfortunate event of the future. 2) Tax Deduction: Under section 80C of the Income Tax Act of 1961 one can get tax deduction on premiums up to one lakh rupees. Life Insurance policies thus decrease the total taxable income of an individual. 15 | P a g e
  16. 16. 3) Loans: An individual can easily access loans from different financial institutions by pledging his insurance policies. 4) Retirement Planning: What had provided protection against the financial consequences of premature death may now be used to help them enjoy their retirement years. Moreover the cash value can be used as an additional income in the old age. 5) Educational Needs: Similar to retirement planning the cash values that flow from ones life insurance schemes can be utilized for educational needs of the insurer or his children. Product Portfolio: Life insurance products are designed to suit the requirements of customers. Fundamentally the product provide for:  Risk cover  Investment  Health cover 16 | P a g e
  17. 17. In every product, to a certain degree, risk cover is imperative for it to fall under the category of insurance. Based on the coverage of the product, the premiums are calculated and the customer pays accordingly. In order to suggest the right product, it is essential for an agent to understand the requirements of the customer well. Reliance Life Insurance Company Limited has offered 9traditional plans to the customers, which are listed as follows: 1. Reliance Term Plan 2. Reliance Whole Life Plan 3. Reliance Child Plan 4. Reliance Endowment Plan 5. Reliance Special Endowment Plan 6. Reliance Cash Flow Plan 7. Reliance Credit Guardian Plan 8. Reliance Special Credit Guardian Plan. Each of the above traditional plans is discussed as follows:  Reliance Term plan: This insurance policy is designed for those who only want life cover for the protection of their family, and do not wish to save for themselves. It can also be useful to business firms that wish to provide financial security to their business against the sudden loss of partners or valuable manpower. Since there is no saving element or bonus provision, the premium is very low. Hence, high risks plans with a low premium.  Reliance Whole Life Plan: This insurance policy is designed for people who do not wish to avail any of benefits themselves but wish to create an immediate estate to protect their family by availing of insurance cover on their life at a very low cost.  Reliance Child Plan: This insurance policy is designed for people who wish to save money for a future time when there will be a recurring need for substantial amounts of money. This is especially true when it comes to paying large sums of money for higher education as and when your son or daughter is studying to become an Engineer, a Doctor or specialize in some other field, or is perhaps planning to go abroad. This money is payable in equal installments over the last 4 years of the policy term. 17 | P a g e
  18. 18.  Reliance Endowment Plan: Reliance Life Insurance‘s Reliance Endowment Plan is the key to all your financial needs. It is an inexpensive and easy way to protect you, your family or your business. In a nutshell this plan will keep you financially prepared for all the special occasions in your life - your daughter‘s wedding, your child‘s university education or even a new office for your business - by eliminating the burden that a shortage of money creates. In the event of your untimely death, Reliance Endowment Plan will also assist your loved ones through this difficult time by the financial support that it provides. Reliance Endowment Plan also gives you the additional benefit of participating in the company‘s profits, which you will receive at the end of the policy period.  Reliance Cash Flow Plan: This insurance policy is designed for those who have a recurring need for reinvestment in business or look for short-term investment channels. The advantage of the policy is that they need not part with a sizable amount of money at any one time, but create, through regular premium payments, a periodic return of lump sums which become available for reinvestment a the higher returns, while providing simultaneously, substantial life cover. Alternatively, it can be used to meet any immediate financial crisis in the family like your son's college admission, your daughter's engagement, and renovation of your home or perhaps, a holiday abroad. The money is payable in installments. The first installment is paid at the end of the 4th year and thereafter at the end of every 3rd year.  Reliance Credit Guardian Plan: This insurance policy is designed for those who not only safeguards individuals but also families and businesses from the financial hardship that could arise from unfortunate and unexpected death.  Reliance Special Credit Guardian Plan: This insurance policy is designed for those who not only safeguards individuals but also families and businesses from the financial hardship that could arise from unfortunate and unexpected death, disability or critical illnesses 18 | P a g e
  19. 19. Unit linked policy A unit-linked policy is a life assurance policy in which the benefits depend on the performance of a portfolio of shares. Each premium paid by the insured person is split: a part is used to provide life assurance cover, while the balance (after the deduction of costs, expenses, etc.) is used to buy units in a unit trust. In this way, a small investor can benefit from investment in a managed fund without making a large financial commitment. As they are linked to the value of shares, unit linked policies can go up or down in value. Policyholders can surrender the policy at any time and the surrender value is the selling price of the units purchased by the date of cancellation 9lessexpense). A small part of the contribution is used for providing life cover and the balance is invested in unit. Legal heirs are entitled to the amount of insurance cover and entitled units in case of death of the insured. Reliance Life Insurance Company Limited has also offered the two Unit Linked Plans, which are listed as follows: 1. Reliance Market Return Plan. 2. Reliance Golden Years Plan. The above two ULIP plans are discussed as follows: 3. Reliance Market Return Plan: Reliance Market Return Fund is the unitlinked product that helps you invest in the financial markets in a combination of investment instruments of your choice. You can enjoy the returns from the markets without the trouble of monitoring and managing your own investment portfolio and keeping track of the market movements. At the same time your investment premiums provide you with insurance cover. Reliance Market Return Fund unit-linked insurance plan provides you with a basket of fund options that balances your return and risk exposure while providing life cover at the same time. 4. Reliance Golden Years Plan: Reliance Golden Years Plan. The Reliance Life Insurance ‗no-worry stay happy‘ retirement plan. Reliance Golden Years Plan is a flexible package that provides freedom of choice in choosing the type of investment, life cover, vesting options such as commuting and annuity options. Contributions provide Income tax savings as well. Reliance Golden Years Plan, a flexible pension product is available for all individuals who are between the ages of 18 and 65. 19 | P a g e
  20. 20. Marketing campaigns Reliance Life insurance has very has a very strong brand recall because of reliance brand image. Reliance life has launched commercials as well as done outdoor campaigns from time to time. In 2009, Reliance life associated itself with the blockbuster movie 3 idiots (tagline – ―All is well‖) to promote another proposition ―jab hai saath Reliance life insurance, all is well‖. Reliance Life Product Table: Retirement/pension plans Reliance life traditional golden plan Child plan Reliance Child plan Term Plan Reliance Term plan Term Plan Reliance Simple term plan Term Plan Reliance Special term plan Term Plan Reliance Credit guardian plan Term Plan Reliance Special credit guardian plan Saving & Investment Plan Reliance Money multiplier plan Saving & Investment Plan Reliance Endowment plan Saving & Investment Plan Reliance Super five plus Saving & Investment Plan Reliance connect 2 life plan Saving & Investment Plan Reliance whole life plan Saving & Investment Plan Reliance cash flow plan Table 2.1 20 | P a g e
  21. 21. Competitors: Private players: List of the Life Insurance companies in India as on 31st December 2011 Life Insurance Corporation of India Bajaj Allianz Life SBI Life TATA-AIG Birla Sun Life Sahara IDBI Federal Future generali India Max New York Bharti AXA HDFC Standard MetLife India ING-Vysya ICICI-prudential Canara HSBC OBC AEGON Religare DLF Pramerica Star Union Dai-ichi India First Shriram Kotak Mahindra Old Mutual AVIVA Table 2.2 21 | P a g e
  22. 22. Organizational Structure Chairman Vice Chairman CEO Territory Manager Marketing Department Online marketing department Finance Department Direct marketing department Accounts team Funds collecting team Agents Graph 2.1 22 | P a g e
  23. 23. Now let’s depict the market share of these players on diagram Market share % LIC BAJAJ ALIANCE ICICI PRUDENTIAL HDFC STANDARD SBI LIFE BIRLA SUNLIFE TATA AIG MAX NEWYORK AVIVA KOTAK MAHINDRA OLD MUTUAL ING VYSYA RELIANCE LIFE MET LIFE SAHARA Graph 2.2 Here we can see from the diagram that LIC is the market leader and it commands the major part of the total life insurance market. Its market share was approximately 98% before 2000 but after the entry of private players it has significantly decreased. Among private players Bajaj Allianz stands first. It has the market share of approximately 7.56% in the total market and it constitutes 40% of the market share among private players. HDFC Standard comes third. SBI Life insurance Company Limited comes fourth. ICICI Prudential is also one of the fastest growing life insurance companies in India. Rest of the players has market share below 2%. 23 | P a g e
  24. 24. Departments Marketing Department: Marketing department of reliance life insurance Company is of two types. Online marketing department and Direct marketing department. Online marketing department will advertises the company by telling their plans and the reputation and department advertise the company through agents. HR Department: It is the management of an organization‘s workforce, or human resources. It is responsible for the attraction, selection, training, and assessment and rewarding of employees, while also overseeing organizational leadership and culture, and ensuring compliance with employment and labor laws. In circumstances where employees desire and are legally authorized to hold a collective bargaining agreement the employees, HR will typically also serve as the company‘s primary liaison with the employee‘s representatives (usually a labor union). Finance Department: Finance is often defined simply as the management of money or ―fund‖ management. Modern finance however is a family of business activity that includes the organization, marketing, and management of each and money surrogates through a variety of capital accounts, instrument and markets created for transaction and trading assets, liabilities and risks. Awards and Achievements 3rd largest private players in a span of just 4 years, moved from 11thposition to 3rd. Amongst the fastest growing companies for 4 year in a row. Continuous increase in market share over 4 years, from 1.9% in 2005-06 to 10.26%. RLIC has achieved a growth rate of 21% while the private industry has grown at 13%. 24 | P a g e
  25. 25. Fastest to reach the 5 million policy mark. Largest private insurer in terms of policy count in 2009-10. 1250 branches 2, 00,000 advisors and over 18,000 employees. RLIC continues to be amongst the foremost Life Insurance companies in India to certified ISO 9001:2000 for all processes. Awarded the Jamnalal Uchit Vyavahar puraskar 2007 –Certificate of Merit in financial services category by council for fair Business practices(CFBP) The Company has also won the DL Shah Quality Council of India Commendation Award in the services category in Feb 2008 for its work on promoting self help channel for service. 25 | P a g e
  26. 26. Title of the Study: Organizational study of Reliance Life Insurance with Reference to customer satisfaction. Statement of the Problem Reliance life insurance is one of the best insurance companies in India. They have many branches in all states. They have gathered a lot of consumers to build their market n insurance sector. Consumer satisfaction is the very essential factor for doing any type of business. A firm should maintain a level of consumer satisfaction with the services they provide. Consumer‘s satisfaction is hence essential for the company in order to maintain the consumers to be loyal. Objectives of the Study: To find out overall standard of Reliance Life Insurance with respect to service provided to customers. To identify the factors affecting customer satisfaction in life insurance sector. To offer suggestions based on findings. Need for the Study: Review of literature reveals that very little research has been done on insurance industry in India. Considering the fact that insurance is coming up in a big way in India, there is an emergent need for doing research on various facets of insurance industry in India. The need and significance of the study can be summarized as: The basic need for the study is to know how much customers are satisfied with services of reliance life insurance. 26 | P a g e
  27. 27. Insurance has a very long history but most of the studies are done from the finance point of view not from marketing view point. Such studies are important because companies need to market themselves to increase their market share. This research project is an effort to fill that gap. As revealed by the review of literature, customer satisfaction has been ignored in the field of insurance services. Scope of Study: The study is based on the survey conducted on various customers who shared their satisfaction levels with reliance life insurance Company and their services. The scope of the study is restricted to the Life Insurance sector only. Although there are 23 life insurance companies in the market Life Insurance Corporation (LIC) holds 64 percent of the market share. Methodology of the Study: Methodology of the study adopted is the survey method. For primary data a sample size of 40 customers were contacted and data is obtained from them through questioners. Respondents were contacted at their work places itself for their convenience. The findings are limited to the city of Bangalore. For secondary data marketing books, magazines, journals were referred. Sources of data: For the purpose of this study data is collected from two sources mentioned above. Namely: 1. Primary source 2. Secondary source 1. Primary source: It is the original source. The data is collected directly from respondents through questioners, personal interviews and through observation. 27 | P a g e
  28. 28. 2. Secondary source: These are the sources containing data which have been collected and compiled for another purpose. This source consists of readily available information and already compiled statistical statement whose data may be used by researchers for their study. Tools for Data Collection A carefully planned structured questionnaire was designed to collect data from the insurance holders. The following aspects were covered in the questionnaire. Sampling: Sampling is one of the major tools for marketing research, which is connected with collecting, analyzing and interpreting data. It involves the study, inconsiderable details, of relatively small numbers of information taken from a larger group. It is a process of extracting sample from a population. Defining the population requires that one can describe the characteristics of the group which information is required in clear unambiguous terms. The population comprises individuals. Households, firms and other organizations. Sampling Technique: The technique following is "Simple Random Sampling‖. Simple random sampling: A simple random sample is a subset of individuals (a sample) chosen from a larger set (a population). Each individual is chosen randomly and entirely by chance, such that each individual has the same probability of being chosen at any stage during the sampling process. Sample Size: The questionnaire contains 10 questions and sample size is 40. 28 | P a g e
  29. 29. Limitations of the Study: The case study pertains to only one branch of Reliance Life Insurance Company due to the limitation of time frame. The sample size of 40 might not represent the perception of whole population. The opinion expressed by respondents may be biased. Another limitation is time shortage. If given more time the reports must have been more concluding. This study is restricted to customers only. Sample size is restricted to only 40 respondents due to time constraints. 29 | P a g e
  30. 30. Data Analysis and Interpretation Analysis was done on the responses received from the people that were interviewed. In this section we will look at the questions detail, the count of responses received, the percentage of response received. Basis the same we will arrive at a finding and then proceed to draw a logical conclusion from the same. The questionnaire in detail is attached at the end of this report. All the Respondents were assured of full confidentially after they agreed to our request of answering the questionnaire for the benefit of study. Further they were also informed that the information being provided by them was going to be used strictly for an educational purpose and only towards the same. In this chapter ahead we will deal with each one of these questions individually and understand what results can be derived from the same .Every question will be followed by a logical chart providing a visual representation of the findings. Table 4.1 Showing Importance of Insurance Options Yes No Don‘t know Total No. of Responses 35 3 2 40 Table 4.1 Percentage 87.5 7.5 5 100 Analysis The above table shows that out of 40 respondents, 35 comprising 87.5% of the total sample size feels that yes insurance is important, while 3 comprising 7.5% feels that it is not important and remaining 5% don‘t know. 30 | P a g e
  31. 31. Graph representing the responses received in Percentage 100 90 80 70 60 Yes 50 No 40 Don't know 30 20 10 0 Response Graph 4.1 Interpretation From the above chart we can infer that most of the people think that insurance is important, while a mere population says No, insurance is not important and remaining minority says no idea. The analysis shows that people are highly educated and knows the importance of insurance in their life. 31 | P a g e
  32. 32. Table 4.2 Showing Quality of Service from Company Advisors Options Excellent Good Fair Poor Total No. of Responses 5 28 5 2 40 Table 4.2 Percentage 12.5 70 12.5 5 100 Analysis The above table shows that out of 40 respondents, 5 comprising 12.5% of the total sample size say reliance life insurance is excellent, while 28 comprising 70% feels that it is good, 5 people say just fair and remaining 5% regard it a poor company. Graph representing the responses received in Percentage Response Excellent Good Fair Poor Graph 4.2 32 | P a g e
  33. 33. Interpretation From the above chart we can understand that a major chunk of the population grades the service received as good, while an equal percentage people feel that it is excellent and fair service. This is actually a good point for the company that most of the people grade their service as good. Their should be a little improvement where we could take a little extra care of customers and have more satisfied customers. Table 4.3 Showing Recommendation analysis of Reliance Life Insurance Options Definitely I think so yes I don‘t think so No Total No. of Respondents 15 21 3 1 40 Table 4.3 Percentage 37.5 52.5 7.5 2.5 100 Analysis The above table shows that out of 40 respondents, 15 comprising 37.5% of the total sample size says they would definitely recommend Reliance to their friend in need, while 21 comprising 52.5% feels they think they will recommend, other 10% had negative response. 33 | P a g e
  34. 34. Graph representing the responses received in Percentage Response Definitely I think so yes I don’t think so No Graph 4.3 Interpretation From the above chart we can interpret that 90% of the people are positive when the question of recommendation arises. This is a very good point for the company. In a country like India a word of mouth has a lot of value. This would help in business growth for the company. Table 4.4 Showing Satisfaction levels regarding Amount of Service Received Options Very satisfied Mostly satisfied Quite indifferent Dissatisfied Total No. of Respondents 20 12 6 2 40 Table 4.4 Percentage 50 30 15 5 100 34 | P a g e
  35. 35. Analysis The table shows that out of 40 respondents, 20 comprising 50% of the total sample size says they are very satisfied with Reliance, while 12 comprising 30% feels mostly satisfied. Other 20% feels lack in service quantity. Graph representing the responses received in Percentage Response 50 45 40 35 30 25 20 15 10 5 0 Response Very satisfied Mostly satisfied Quite indifferent Dissatisfied Graph 4.4 Interpretation From the above chart it is very clear that half of the people in Reliance family are very satisfied in terms quantity service they received. Nearly a third of people feel mostly satisfied, whereas remaining people are not satisfied with quantity service, the company needs to improve in terms of service and satisfy the customers. This is a very crucial point as negative things spread faster than the positive one‘s. 35 | P a g e
  36. 36. Table 4.5 Showing whether the guidance received helped to deal with the problems more effectively Options Yes No Total No. of respondents 32 8 40 Table 4.5 Percentage 80 20 100 Analysis The table shows that out of 40 respondents, 32 comprising 80% of the total sample size were able to deal with their problems from effectively from the guidance they received from the company‘s insurance advisors, 8 people comprising another 20% were dissatisfied. Graph representing the responses received in Percentage Response 80 70 60 50 40 30 Response 20 10 0 Yes No Graph 4.5 36 | P a g e
  37. 37. Interpretation The chart above clarifies that majority of the people are benefitted from the guidance which they received from company‘s insurance advisors. This is a very strong and positive point, which also shows the employees commitment to company‘s motive. Very less people are not benefitted it could be result of 6isselling by advisors, which has to taken care by giving proper training to the advisors. Table 4.6 Showing whether clients would invest in Reliance Life Insurance if required in future again Options Definitely I think so yes I don‘t think so yes No, definitely not Total No. of responses 27 10 2 1 40 Table 4.6 Percentage 67.5 25 5 2.5 100 Analysis The above table shows that out of 27 respondents comprising 67.5% of the total sample size says they would definitely go for Reliance if required in future, while 10 comprising 25% feels they think they will go with Reliance and other 7.5% had negative thought. 37 | P a g e
  38. 38. Graph representing the responses received in Percentage Response Definitely I think so yes I don’t think so yes No, definetely not Graph 4.6 Interpretation The chart above shows that most of the customers would come back to Reliance if they needed another insurance which clearly shows the level of highly satisfied customers, and a few of the dissatisfied customers said they would not like to go for Reliance insurance in future. Loosing on customers is a setback for the company and it should work on it. 38 | P a g e
  39. 39. Table 4.7 Showing need Satisfaction Options Yes Very much yes Not much No Total No. of responses 27 7 4 2 40 Table 4.7 Percentage 67.5 17.5 10 5 100 Analysis The above table shows that out of 2 respondents comprising 5% of the total sample size couldn‘t meet their needs of the insurance policy thy took, while 85% feel they got the right policy meeting their needs. This is possible due to a wide range of products. Graph representing the responses received in Percentage Response Yes Very much yes Not much No Graph 4.7 39 | P a g e
  40. 40. Interpretation The above pie chart shows the responses of people when asked whether the suggested products met their needs, a huge chunk of people said yes the insurance plan suggested to them was helpful to meet their needs. Table 4.8 Showing factors of choosing Reliance Life Insurance Options Personal interest Friends Family Advertisements Total No. of Responses 12 11 4 13 40 Table 4.8 Percentage 30 27.5 10 32.5 100 Analysis The above table shows that out of 40 respondents, 12 comprising 30% of the total sample size is with Reliance due to their personal interest in the company, 37.5% are influenced by family and friends. Others comprising 32.5% are influenced by advertisements. 40 | P a g e
  41. 41. Graph representing the responses received in Percentage Response 35 30 25 20 15 10 5 0 Response Graph 4.8 Interpretation The above bar diagram depicts the factors of influence, which made people to be a part of the huge Reliance family. The responses show an equal amount of influence from friends, personal interest and advertisements. Family influence was much lower than the rest of three. 41 | P a g e
  42. 42. Table 4.9 Showing Recommendation Levels Options Excellent Very good Fair Poor Total No. of Responses 12 17 10 1 40 Table 4.9 Percentage 30 42.5 25 2.5 100 Analysis The above table shows that out of 40 respondents, 12 comprising 30% of the total sample size considers Reliance life insurance as an excellent company. 17 comprising 42.5% think of it as very good company, 10 say just fair and remaining 1 i.e. 2.5% consider poor. Graph representing the responses received in Percentage Response Excellent Very good Fair Poor Graph 4.9 42 | P a g e
  43. 43. Interpretation The above chart describes customer responses, when asked to recommend the company to their friends. A third of them would say excellent, other major chunk would consider it very good. This shows the trust of people in the company. It is a very positive thing that company‘s name hold a great value to its investor‘s customers. Table 4.10 Showing areas of Improvement Options Marketing Customer relations Products Total No. of Respondents 20 9 11 40 Table 4.10 Percentage 50 22.5 27.5 100 Analysis The above table shows that out of 40 respondents, 20 comprising half of the total sample size said Reliance life insurance need to improve on marketing, 9 said customer relations and remaining 11 said Reliance Life should work on its Products. 43 | P a g e
  44. 44. Graph representing the responses received in Percentage Response Marketing Customer relations Products Graph 4.10 Interpretation The above chart describes customer responses, when asked about on which area they think Reliance Life Insurance should improve on, half of the respondents mentioned marketing as area of improvement. Remaining half people mentioned customer relations and products as the areas of improvement in almost equal percentage. 44 | P a g e
  45. 45. Summary of Findings Majority think that insurance is important, At the same time there are very less people who don‘t know the significance of insurance. A tenth of the people consider the information received from company advisors as excellent, majority grade it good. Whereas a very minor population consider advisor service as poor. It was found that a fair population would definitely recommend Reliance Life Insurance to friend in need. Half of the people said they would also probably do the same. Very minute population had negative response. Half of the people in Reliance family are very satisfied in terms quantity service they received before and after the sales of insurance product. A third is mostly satisfied, whereas a fifth of population is not satisfied with quantity service. Findings show that almost all people could deal with their problems effectively after the insurance guidance. A fifth of people said it wasn‘t helpful for them and they couldn‘t tackle the problems as they thought. Findings show that almost all people would choose Reliance if they had to take another insurance. 45 | P a g e
  46. 46. It was found that almost all people were satisfied with the insurance product while a tenth of them think the insurance plan couldn‘t help exactly the way they thought/advisor told. It was found that people had equal influence from friends, Personal Interest & advertisements. The study shows that expect a fourth of population others consider Reliance a good company. Half of the people say marketing as main area to be improved. Other half consider customer relations and product development equally. 46 | P a g e
  47. 47. Suggestions 47 | P a g e
  48. 48. Conclusion 48 | P a g e
  49. 49. Questionnaire Personal details: Name: Contact: Age: Email id: 1. Is insurance important according to you? a. Yes b. No c. Don’t know 2. How would you rate the quality of service you received from company advisors? a. Excellent b. Good c. Fair d. Poor 49 | P a g e
  50. 50. 3. If a friend were in need of insurance, would you recommend Reliance life insurance to him/her? a. Definitely b. I think so yes c. I don’t think so d. No 4. How satisfied are you with the amount of service you received? a. Very satisfied b. Mostly satisfied c. Quite indifferent d. Dissatisfied 5. Have the guidance you received helped you to deal more effectively with your problems? a. Yes b. No 6. If you were to take another insurance policy, would you come back to reliance insurance? a. Definitely b. I think so yes c. I don’t think so yes d. No, definitely not 50 | P a g e
  51. 51. 7. Did the insurance product help you meet your needs? a. Yes b. Very much yes c. Not much d. No 8. What factors influenced to select Reliance as your Life Insurance Company? a. Personal interest b. Friends c. Family d. Advertisements 9. How likely are you to recommend our company to a friend or a relative? Would you say chances are? a. Excellent b. Very good c. Fair d. Poor 51 | P a g e
  52. 52. Bibliography and Reference      Life Time Magazine of Reliance Life Insurance  Net Bios Computer Academy‘s Life Insurance Book  Brochures of Reliance Life Insurance 52 | P a g e