Ujjwal final sip

A study on how advertisements help in changing the perception of
consumers in the Insurance sector
CMS Business School, Jain University Page 1
CHAPTER 1
INTRODUCTION TO THE STUDY

This study is aimed at studying the impact of advertising and its various
strategies in the insurance industry. The study also focuses on the role of
insurance in general and the role of Birla Sun life Insurance as a governing body
for the insurance sector. The study also involves the overview of various players
in the market for this specific sector. Indian insurance is a flourishing industry,
with several national and international players competing and growing at rapid
rates. Thanks to reforms and the easing of policy regulations, so is the
increasing role of advertising which effect the consumers’ choice. The study
being descriptive and explanatory in nature, findings have been made through
theoretical analysis in order to get an insight into the cause and effect
relationship of advertising and consumers’ perception relating to insurance
products which ultimately effects the insurance industry on a whole. Indian
economy is developing and having huge middle class societal status and
salaried persons. Their money value for current needs and future desires here
the pendulum moves to another side which generate the reasons behind holding
a policy. Here the attempt has been made in this research paper to study the
buying behaviour of consumers towards life insurance services.
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 have started their
operation in India. With their world market experience and network, these
companies have offered many good schemes to lure 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. 65% market
share. But why Indian consumers do not trust on many companies and why the
major population of India do not have any life insurance policy or what are the
factors plays major role in buying behaviour of consumers towards life
insurance policies.

1.1.1 Objective of the study
 To know the awareness of Insurance policies and Insurance
Companies.
 To understand the Consumer Buyer Behavior for Insurance
Policies.
 To understand the role of advertisements in creating awareness
 To understand the impact of advertising on the sales.
 To conclude on the effect of advertising on sales
1.1.2 Significance of the research
The reason this topic is chosen is to determine customers’ views and impact
towards how advertisements help in changing the perception of consumers in
the Insurance sector , so that the marketers can use the views and create
effectiveness among the customers.
1.1.3 Methodology for collection of data
Data collection is the process of gathering and measuring information on
targeted variables in an established systematic fashion, which then enables one
to answer relevant questions and evaluate outcomes.
The goal for all data collection is to capture quality evidence that then translates
to rich data analysis and allows the building of a convincing and credible
answer to questions that have been posed.
Accurate data collection is essential to maintaining the integrity of research.
Both the selection of appropriate data collection instruments (existing,
modified, or newly developed) and clearly delineated instructions for their
correct use reduce the likelihood of errors occurring. A formal data collection
process is necessary as it ensures that data gathered are both defined and
accurate and that subsequent decisions based on arguments embodied in the
findings are valid. The process provides both a baseline from which to measure
and in certain cases a target on what to improve.
In this research conducted survey method was being used. Initially a
questionnaire was being made, respondents were asked to fill the questionnaire.

From the responses obtained through questionnaire, analysis of the data was
being prepared using pie- charts and bar graphs.
1.1.4 Literature Review
The insurance industry thrives on financial marketing organizations
selling/marketing products to agencies...and agencies selling/marketing
products to agents, who in turn sell to these products to consumers.
Broad advertising is typically done at the consumer level. However, at the end
of the day insurance companies must attract agents to sell the products. Matin
Khan-“Consumer Behaviour and Advertising Management”, 2006. The author
deals with the consumer behaviour as far as the advertising is concerned. The
book deals with the usual aspects of consumer behaviour like culture, social
class, lifestyle and psychographic segmentation etc. The author also discusses
outlet selection, consumerism, customer delight, e-consumer behaviour and
changing consumer behaviour in the Indian Context.
Further value addition has been done by discussing ethical and social issues in
advertising, management of an advertising. Agency and role of advertising in
national development with the help of various Indian examples and case studies.
Flemming Hansen, Sverre Riis Christensen “Emotions, Advertising and
Consumer Choice. Emotions, Advertising and Consumer Choice focuses on
recent neurological or psychological insights originating from brain scanning or
neurological experiments on basic emotional processes in the brain and their
role in controlling human behaviour. These insights are translated by the authors
to cover the behaviour of ordinary individuals in every-day life. The book looks
at these developments in the light of traditional cognitive theories of consumer
choice and it discusses the implications for advertising and other
communication testing. The book offers a first-time thorough review of
contemporary thinking in the field of consumer behaviour and an exhaustive
amount of empirical evidence to support the authors' notion of an emerging
paradigm of emotionally-based consumer choice where mental brand equity
becomes a central phenomenon.
India is one of the emerging markets that pose a unique set of challenges to
marketers. The importance of the context and the usefulness of concepts in the
Indian context is the core proposition. The diversity of a mix of factors such as

cultural aspects, lifestyles, demographics and unbranded offerings make
consumer behaviour a fascinating study.
Michael L. Smith (1982) said that a typical life insurance contract provides a
package of options or rights to the policy owner that is not precisely duplicated
by any other combination of commonly available contracts. Viewed from this
perspective, life insurance enjoys a unique position in the field of investments
and should be judged in this light. The paper shows that an options viewpoint
provides a more complete explanation of policy owner behaviour towards life
insurance than the conventional savings-and-protection view.
Michael L. Walden (1985) told that the option's package view of the whole life
insurance policy suggests that a whole life policy is a package of options, each
of which has value and is expected to influence the price of the policy. This
viewpoint implies the general hypothesis that price differences between whole
life policies can be explained by differences in policy contract provisions and
differences in selected company characteristics. The option's package theory
was empirically investigated using regression analysis on data from a sample of
policies marketed in North Carolina. The results suggest support for the options
package theory.
Kirchler and Angela-Christian Hubert (1999) found that the present study aims
at describing spouses’ relative dominance in decisions concerning different
forms of investment. As determinants of spouses’ dominance, partnership
characteristics, such as partnership role attitudes, marital satisfaction and
individual expertise in relation to different investments, were considered. A
questionnaire on spouses’ dominance in making decisions on various
investments, on the characteristics of particular investments and on partnership
characteristics was completed by 142 Austrian couples. Basically, wives
appeared to adapt to the dominance exerted by their husbands in savings and
investment decisions. Wives’ dominance was highest in egalitarian partnerships,
where autonomic and wife-dominated decisions were reported more frequently
than in traditional partnerships. Additionally, spouses’ relative expertise in
relation to the investments in question showed strong effects on dominance
distribution: Spouses with higher expertise than their partners exerted more
dominance in decision-making processes.

Amy Wong, (2004) empirically examined the role of emotional satisfaction in
service encounters. Specifically, this study seeks to: investigate the relationship
between emotional satisfaction and key concepts, such as service quality,
customer loyalty, and relationship quality, and clarify the role of emotional
satisfaction in predicting customer loyalty and relationship quality. In doing so,
this study used the relationship between emotional satisfaction , service,
quality, customer loyalty, and relationship quality as a context, as well as data
from a sample survey of 1,261 Australian retail customers concerning their
evaluation of their shopping experiences to address this issue. The results show
that service quality is positively associated with emotional satisfaction, which is
positively associated with both customer loyalty and relationship quality.
Further investigations showed that customers' feelings of enjoyment serve as the
best predictor of customer loyalty, while feelings of happiness serve as the best
predictor of relationship quality. The findings imply the need for a service firm
to strategically leverage on the key antecedents of customer loyalty and
relationship quality in its pursuit of customer retention and long-term
profitability. Helmut Gründl, Thomas Post, Roman Schulze, (2005) found that
demographic risk, i.e., the risk that life tables change in a nondeterministic way,
is a serious threat to the financial stability of an insurance company having
underwritten life insurance and annuity business. The inverse influence of
changes in mortality laws on the market value of life insurance and annuity
liabilities creates natural hedging opportunities.
Evan Mills, Ph.D.(1999) Studied the insurance industry is rarely thought of as
having much concern about energy issues. However, the historical involvement
by insurers and allied industries in the development and deployment of familiar
technologies such as automobile air bags, fire prevention/suppression systems,
and anti-theft devices, shows that this industry has a long history of utilizing
technology to improve safety and otherwise reduce the likelihood of losses for
which they would otherwise have to pay. We have identified nearly 80
examples of energy-efficient and renewable energy technologies that offer
“loss-prevention” benefits, and have mapped these opportunities onto the
appropriate segments of the very diverse insurance sector (life, health, property,
liability, business interruption, etc.).
Some insurers and risk managers are beginning to recognize these previously
"hidden" benefits.

Roger. A. Formisano (1981) examined, via consumer interviews, the impact of
the National Association of Insurance Commissioner's Model Life Insurance
Solicitation Regulation as implemented in New Jersey. A substantial portion of
the insurance buyers sampled did not become aware of the provisions of the
regulation aimed to improve their buying ability. Further, many life insurance
buyers were not well informed concerning the nature and operation of life
insurance contracts, and in particular, the life insurance policies that they had
purchased.

CHAPTER II
INDUSTRY PROFILE

2.1.1 Introduction to Insurance
Insurance occupies an important place in the complex modern world since risk,
which can be insured, has increased enormously in every walk of life. This has
led to growth in the insurance business and evolution of various type so
insurance covers. The insurance sector acts as a mobilizer of savings and a
financial intermediary and is also a promoter of investment activities. It can
play a significant role in the economic development of a country, while
economic development itself can facilitate the growth of the insurance sector.
Insurance is a mechanism that ensures an individual to thrive on adverse
consequences by compensating the individual, his/her loss financially. Every
individual in the world and all activities connected with him/her, be it life,
profession, business, travel or any other pursuits are subject to unforeseen and
uncalled for hazards or dangers. The benefit that an individual enjoys in his life
by owning a car or a house or a factory can be snatched by sudden accident
which canrender even the individual immobile, and his family vulnerable. At
this critical juncture, only insurance helps him not only to survive but recover
his loss and continue his life in a normal manner, which would otherwise be
unthinkable.
Insurance can be classified broadly into :( a) life insurance, and (b) general or
non-life insurance. (a)Life insurance or life assurance is a contract between the
policy owner and the insurer, where the insurer agrees to pay the designated
beneficiary a sum of money upon the occurrence of the insured individual’s
death or other event, such as terminal or critical illness. In return, the policy
owner agrees to pay a stipulated amount at regular intervals or in lump sums.
Life-based contracts tend to fall into two major categories:

Protection policies: designed to provide a benefit in case of a specified event,
typically against lump sum payment. A common form of this policy is term
insurance.
Investment policies: the main objective is to facilitate the growth of capital by
single or regular premiums. The common forms in this category include whole
life, universal life and variable life policies.
General insurance or non-life insurance policies, including automobile and
homeowners’ policies, provide payments depending on the loss from a
particular financial event. General insurance typically comprises any insurance
cover that is not deemed to be life insurance. Some categories of general
insurance policies are: vehicle, home, health, property, accident, sickness and
unemployment, casualty, and credit. The terms of insurance generally depend
on the company providing the cover.
2.1.2 How life insurance works?
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. For example, if John Smith buys a policy on his own
life, he is both the owner and the insured. But if Mary Smith, his wife, buys a
policy on John's life, she is the owner and he is the insured. The owner of the
policy is called the grantee (he or she will be the person who will pay for the
policy). Another important person involved is the beneficiary. The beneficiary
is the person or persons who will receive the policy proceeds upon the death of
the insured. The beneficiary is not a party to the policy, but is designated by the
owner, who may change the beneficiary unless the policy has an irrevocable
beneficiary designation. With an irrevocable beneficiary, that beneficiary must
agree to changes in beneficiary, policy assignment, or borrowing of cash value.

2.1.3 INDUSTRY PROFILE
The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracing the developments in the Indian insurance sector reveals the 360 degree
turn witnessed over a period of almost two centuries.
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
establishment of the Oriental Life Insurance Company in Calcutta.
Some of the important milestones in the life insurance business in India are:
to regulate the life insurance business.
vernment
to collect statistical information about both life and non-life insurance
businesses.
with the objective of protecting the interests of the insuring public.
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 economic reforms initiated in the early 90s paved the way for the growth
and opening up of the financial sector, which led to a sustained period of
economic growth. The insurance industry was opened up for private players in

2000, and has seen tremendous growth over the past decade with the entry of
global insurance majors. India is fast emerging as one of the world‘s most
dynamic insurance markets with significant untapped potential. The insurance
sector plays a critical role in a country‘s economic development. It acts as
mobilize of savings, a financial intermediary, a promoter of investment
activities, a stabilizer of financial markets and a risk manager. The life
insurance sector plays an important role in providing risk cover, investment and
tax planning for individuals; the non-life insurance industry provides a risk
cover for assets.
Boasting of the largest number of operational life insurance policies in the
world, the Indian insurance industry has emerged as a serious destination in the
global insurance market. Until 1999, the business of insurance in India was the
exclusive privilege of two state-owned corporations— the Life Insurance
Corporation of India (LIC) and the General Insurance Company of India (GIC).
The Government of India took a major step towards liberalization of this
industry in March 2000 and brought into effect the Insurance Regulatory
Development Authority Act (IRDA Act).
The IRDA Act opened the market by doing away with all entry-level
restrictions on private insurers. Thereafter, it has been four years of consistent
growth. With the current potential premium income of the country estimated
India is seen as the sixth largest market in the world. While 80% of its
population remains without life insurance and some of the world's lowest health
and non-life insurance cover levels, the potential of the world's seventh largest
and second most populous country cannot be overlooked. Prospective insurers
have a lot to gain from the 312 million middle-class consumers in India, who 10
have the financial ability to purchase insurance. With only 2.5% of the country's

insurable population currently insured, the market still needs to be tapped
effectively.
2.1.4 THE INDIAN INSURANCE MARKET
From the Indian Life Insurance Company Act in 1912 to the 1RDA Act; in
1999, regulation of insurance business in the country has come a long way.
Insurance is a subject of federal law and all insurance business in India has been
nationalized. The two major legislations dealing with insurance are the
Insurance Act, 1938 and the IRDA Act, 1999. Marine insurance in the country
is governed by the Indian Marine Insurance Act, 1963. Similarly, fire and
marine insurance are dealt with under the Insurance Act, 1972 and the: General
insurance Business (Nationalization) Act, 1972. These enactments contain
provisions relating to the constitution, management and winding up of insurance
companies and the conduct of those types of insurances.
A Tariff Advisory Committee (TAC) is established under the Insurance Act to
regulate rates, terms, conditions and advantages that maybe offered by insurers
for General Insurance Business relating to Fire, Marine (Hull), Motor,
Engineering and Workmen's Compensation in India. In 1999, the IRDA was set
up under the IRDA Act. Companies, aspiring to carry on insurance and
reinsurance business in India, are required to register with IRDA, which is the
sole authority for granting licenses to agents. There is neither a restriction on the
license numbers that may be granted nor a system of composite licenses for life
and non-life insurance companies in India. Insurance companies are strictly
forbidden from dealing with products beyond their scope of license. This
implies that, a life insurance company cannot sell non-life insurance and vice
versa. Insurance agents are, however, allowed to sell both life and non-life
products (composite insurance).

In tune with the Indian government's system of checks and balances imposed
through sector specific Foreign Direct Investment (FDI) limits, IRDA prohibits
100% foreign ownership of an Indian insurance company. An Indian promoter
is required to invest either wholly or team up with a foreign insurer, which can
own no more than 26% of the shares in any new venture. The Indian promoter
must then sell the majority of his shares to the Indian public through a public
offering after 10 years and retain only up to 26% of the shares that is, the same
percentage as that of the foreign investor. IRDA is careful in granting licenses
and has set up strict standards for all aspects of insurance in India. With the
limit on FDI in the sector, the government ensures that state-run agencies such
as the LIC and GIG can maintain their prominence. In June 2003, the Law
Commission prepared a paper identifying 13 potential grounds of revision to the
Insurance Act and the IRDA Act, including merger of relevant provisions of the
two acts, as well as harmonization of the Insurance Act with other rules and
regulations in the sector. The finance ministry is already working towards
comprehensive amendments to the Insurance Act and the IRDA Act, which will
further simplify procedural issues. A major indication of the government's
efforts to invite Private Indian and foreign insurers to invest in the liberalized
market is the FDI cap hike announced by the finance ministry in 2004. These
changes, however, require formal amendments to the IRDA Act, which are still
to be adopted.
2.1.5 Major Players in the Market
The Indian insurance sector till recently comprised of only two state insurers—
the LIC, for life insurance, and the GIG, for general insurance. In December
2000, GIG subsidiaries (Oriental Insurance Co. Ltd., New India Assurance Co.
Ltd., National Insurance Co. Ltd. and United India Insurance Co. Ltd.) were
restructured as independent insurance companies. At the same time, GIG itself
was converted into a national reinsurer. In July 2002, Parliament passed a bill,
which cut the formal relationship between the four subsidiaries and GIG.

In December 2000, GIG subsidiaries (Oriental Insurance Co. Ltd., New India
Assurance Co. Ltd., National Insurance Co. Ltd. and United India Insurance Co.
Ltd.) were restructured as independent insurance companies. At the same time,
GIG itself was converted into a national reinsurer. In July 2002, Parliament
passed a bill, which cut the formal relationship between the four subsidiaries
and GIG.
Private Players- Life and Non-Life Insurance Begun in 1818, with the
establishment of the Oriental Life Insurance Company in Calcutta, the business
of life insurance in India has come a long way. The most popular products in
this sector are 'Endowment' and 'Money Back' policies. More than 80% of the
Indian life insurance business comes from these two products.
The major players in this field include:
Insurance Co. Ltd.
nsurance Company Pvt. Ltd.
Allianz Life Insurance Co. Ltd.
Prudential Life Insurance Co. Ltd.
Life Insurance Co. Ltd.
Insurance Co. Pvt. Ltd.
Life Insurance Co. Pvt. Ltd.
York Life Insurance Co. Ltd.
Mahindra Life Insurance Co. Ltd.
Life Insurance Co. Ltd.
Standard Life Insurance Co. Ltd.

Consistent growth has been observed in the private insurance markets. Though
LIC has been in the country for a long time, it didn't tap much of the rural
market. It only concentrated on the endowment and money back policies.
Private insurers had taken an advantage of this and had come out with
innovative products like Unit-Linked Insurance Products (ULIPs). As a
competition now, LIC had also started coming out with ULIPs.
The private insurance market has grown despite the continued existence of the
public sector providers. LIC has concentrated on retaining its market in
traditional products like endowment and money back policies, and has not
slackened its hold in the rural areas. This has prompted many of the private
companies to market new and innovative products as a means of competition.
LIC in turn is now moving towards new products like unit linked life products
which to date have mainly been sold by the private sector.
The non-life sector primarily consists of fire and miscellaneous risk insurance
policies. Also, since motor vehicle cover is compulsory in India, it acts as
another chief source of business in the non-life sector. Major players in the non-
life sector in India include:
ianz Bajaj General Insurance Co. Ltd.
2.1.6 Global Scenario
The international insurance industry is one of the largest sectors of finance. It
ranges from consumer to corporate and industrial insurance, and even
reinsurance, or insurance of insurance. The major insurance markets of the
world are obviously the US, Europe, Japan, and South Korea. Emerging
markets are found throughout Asia, specifically in India and China, and are also
in Latin America.

With the internet and other forms of high-speed communication, companies and
individuals are now able to purchase insurance and related financial products
from almost anywhere in the world. Increasing affluence, especially in
developing countries, and a rising understanding of the need to protect wealth
and human capital has led to significant growth in the insurance industry.
Given the evolving and growing socio-economic conditions worldwide,
insurance companies are increasingly reaching out across borders and are
offering more competitive and customized products than ever before.
Global insurance platform has witnessed a phenomenal change over the past
decade. The forces of globalization and liberalization have brought the
insurance companies across the world closer to each other than ever before. The
insurance landscape has changed significantly over the years due to many
unforeseen incidents around the world like 9/11, SARS, derailment of corporate
governance, natural disasters like Tsunami, Hurricane Katrina etc.
Outsourcing is another major development in the insurance sector. Waning
margins, massive claims disbursement and increasing competition in recent
years, especially post 9/11, have compelled insurance companies to opt for
outsourcing, to improve efficiency and channelize resources towards the core
functions like product development and innovation.
Over the past ten years, global insurance premiums have risen by more than
50%, with annual growth rates ranging between 2 and 10%.Top ten global
insurance companies are americanintl group(USA), AXA group (france), allianz
worldwide(germany), Manulife financial (Japan),General group (italy),
prudential financial (united states), met life (united states), Aviva(united
kingdom) and Aegon(Netherland).

Countries Insurance
Penetration(premium as a% of
GDP)Insurance Density (Per
CapitaPremiums in USD)
Insurance Density (Per
CapitaPremiums in USD
United Kingdom 12.71 3028.5
Japan 8.70 3165.1
United States 4.48 1611.4
India 1.77 7.6
Australia 6.04 1193.5
China 1.12 9.5
Table 1: Insurance density and penetration at global level
FOREIGN INFLUX In the last three years, despite the equity ratio
restrictions, foreign companies have collectively managed to corner a
considerable share of the Indian insurance market. Investment generally takes
two forms: Outsourced BPO operations and direct shareholding. A recently
published Research and Markets Report in an American insurance journal
emphasized this trend and set out advantages for the US companies to consider
India as an insurance BPO center. Some of the advantages include: Established
destination for outsourcing, low costs, near-shore services, Indian IT

outsourcers extending relationships with insurers, and Indian vendors expanding
to establish a multi-location presence to minimize the risk to their business from
foreign competition.
2.1.7 Indian Scenario
With a huge population base and large untapped market, insurance industry is a
big opportunity area in India for national as well as foreign investors. India is
the fifth largest life insurance market in the emerging insurance economies
globally and is growing at 32-34% annually. This impressive growth in the
market has been driven by liberalization, with new players significantly
enhancing product awareness and promoting consumer education and
information. The strong growth potential of the country has also made
international players to look at the Indian insurance market. Moreover,
saturation of insurance markets in many developed economies has made the
Indian market more attractive for international insurance player.
Growth Insurance business in India is growing at the rate of 15-20% annually
and IRDA has estimated that it is currently of the order of Rs. 812.50 cr. When
combined with banking services, it adds about 7% of the country's GDR
Insurance penetration (i.e., premiums as percentage of GDP) has increased from
2.32% in 2000 to 2.88% in 2003. Likewise, insurance density (i.e., premium per
capita) has increased from Rs. 435.897 in 2000 to Rs. 722.092 in 2003.
Such changes have caused a climb in the country's ranking from 23rd in the
world—in terms of total premium volumes—in 2000, to 19th in 2003. India's
share in the world market has increased from 0.41% to 0.59% during the same
period.
There has been an 83% increase in the premium collected in the three years
following the passage of the IRDA Act. As already noted, the total premium

collected by the insurers both life and nonlife in the year 2004-05 is estimated to
be about Rs. 253.43 bn during the fiscal year 2004-05, (Rs. 66 bn in life and
about Rs. 176.1 bn in non-life premiums). By comparison, estimates for the year
2000-01 put the total premiums at about Rs. 440 bn (Rs. 352 bn in life and Rs.
88 bn in non-life premiums). The average size of life insurance cover before
privatization was around Rs. 50,320. That has since risen to about Rs. 80,500.
The state-owned life insurer—LIC, along with 13 private players, mopped up
Rs. 65.22 bn in premium in the first four months of this fiscal by selling about
62 lakh new policies. And 55 lakh new policies have been sold by LIC alone
which helped it to make an 8.74% rise in premium income at Rs. 49.7 bn during
April-July, this fiscal. The traditional life insurance cover, provided by LIC, has
so far been dominated by the savings policies. Term life' policies have
accounted for less than 2% of the insurance premium of LIC. The new life
insurance companies are concentrating on term life policies in the hope that this
will be their main stream of business. Private players have an average policy
size of Rs. 1, 15,000. The 13 private players have increased their market share
to 23.81% from 17.28% in 2004. In the forefront is Birla Sun life with a market
share of 7.12% making a 49% growth in business at Rs. 4.64 bn. Then comes,
Bajaj Allianz, HDFC Standard, Tata AIG, ICICI Prudential, SBI Life, Max
New York and Aviva.
The Indian Insurance Market - The insurance industry of India consists of 52
insurance companies of which 24 are in life insurance business and 28 are non-
life insurers. Among the life insurers, Life Insurance Corporation (LIC) is the
sole public sector company.
Out of 28 non-life insurance companies, there are six public sector insurers,
which include two specialised insurers namely Agriculture Insurance Company
Ltd for Crop Insurance and Export Credit Guarantee Corporation of India for

Credit Insurance. Moreover, there are 5 private sector insurers are registered to
underwrite policies exclusively in Health, Personal Accident and Travel
insurance segments. In addition to 52 insurance companies, there is sole
national re-insurer, namely, General Insurance Corporation of India. Other
stakeholders in Indian Insurance market include approved insurance agents,
licensed Corporate Agents, Brokers, Common Service Centres, Web-
Aggregators, Surveyors and Third Party Administrators servicing Health
Insurance claims.
Insurance Laws (Amendment) Act, 2015 provides for enhancement of the
Foreign Investment Cap in an Indian Insurance Company from 26% to an
Explicitly Composite Limit of 49% with the safeguard of Indian Ownership and
Control.
2.1.8 Contribution of life insurance in development of economy
 Contribution of Life Insurance Sector in the Economy
 Flow of Insurance Industry in India
 Structure of insurance industry: Snap Shot Industry
 Aggregation of long term savings
 Spread of financial services in rural Areas
 Long term funds for infrastructure development of capital Markets/ Economic
Growth
➢Employment generation
2.1.9 GDP Contribution
1. Contribution of insurance to employment - Insurance helps create both
direct and indirect employment in the economy. Alongside regular jobs in
insurance, there is always demand for a range of associated professionals such

as brokers, insurance advisors, agents, underwriters, claims managers and
actuaries.
The increasing insurance business has increased the demand for highly skilled
professionals as well as semiskilled and unskilled people.
2. Contribution of insurance to infrastructure- Generally, countries with
strong insurance industries have a robust infrastructure and strong capital
formation. Insurance generates long-term capital, which is required to build
infrastructure projects that have a long gestation period. Concurrently, insurance
protects individuals and businesses from sudden unfavourable events. A well
developed and evolved insurance sector is needed for economic development as
it provides long term funds for infrastructure development and simultaneously
strengthens the risk taking ability.
3. Strong Complementarities between Insurance and Banking- Insurance
and banking system deepening appear to play complementary roles in the
growth process. Although insurance and banking separately each make positive
contributions to growth, their individual contributions are greater when both are
present. There is also some evidence that the development of insurancemarkets
contributes to the health of securities markets.
4. Contribution of insurance to FDI- The importance of FDI in the
development of a capital deficient country such as India cannot be
undetermined. This is where the high-growth sectors of an economy play an
important role by attracting substantial foreign investments. Currently, the total
FDI in the insurance sector, which was INR50.3 billion at the end of FY09, is
estimated to increase to approximately INR51 billion in FY10. It is difficult to
estimate, but an equal amount of additional foreign investment, can roughly
flow into the sector if the government increases the FDI limit from 26% to 49%.

5. Insurance Contributes Positively to Economic Growth- The deepening of
insurance markets makes a positive contribution to economic growth. While life
insurance is causally linked to growth only in higher income economies, nonlife
insurance makes a positive contribution in both developing and higher income
economies. Some research suggests that the positive contribution of life
insurance to growth is primarily through the channel of financial intermediation
and long term investments. However, it is important to note that these studies do
not address the important contributions to individual and social welfare from
risk management.
2.1.10 Segments of the market
Two Major Segments of the Insurance Industry
Type of Insurer Covered Contingencies
Property Casualty Insurance Physical Damage, Liability, Health, Disability
Life Insurance Life, Annuities, Health, Disability
Casualty Insurance -Relatively short premium payment period 1 to 2 years
Coverage maybe short in duration – year or two, however Claims may occur
many years after insurance period ends
Asset investments tend to be short term in nature –More in equities than bonds,
emphasis on corporate Securities.
Life Insurance -Relatively long premium paying periods 30 years or longer for
Life insurance, although group coverages for individuals can be 5 or 10 years
in length.
Claims generally occur after many years while the insurance Contract is in-
force

Asset investment allocation tends to be long term – with emphasis on US
Government Bonds, High Grade Corporate Bonds, Securitized Mortgage
Obligation backed by the Federal Government.
2.1.11 Market Segmentation
In addition to 52 insurance companies, there is sole national re-insurer, namely,
General Insurance Corporation of India. Other stakeholders in Indian Insurance
market include approved insurance agents, licensed Corporate Agents, Brokers,
Common Service Centres, Web-Aggregators, Surveyors and Third Party
Administrators servicing Health Insurance claims.
Insurance Laws (Amendment) Act, 2015 provides for enhancement of the
Foreign Investment Cap in an Indian Insurance Company from 26% to an
Explicitly Composite Limit of 49% with the safeguard of Indian Ownership and
Control. Recently, the insurers have become increasingly aware of the possible
improvements in productivity and resulting economies to scale by using Market
Segmentation when appealing to new customers or promoting insurance
services to present customers. Therefore, the key to market segmentation is to
take the so called mass market with a heterogeneous set of needs and through
the use of creative research efforts divide it up into smaller parts or segments
thus giving the insurance marketer some direction in shaping his product
offerings.
Types of Insurance market Segmentation
There are three major types of Insurance market segmentation:-
(1) Psychographic Segmentation- Psychographic segmentation utilizes
consumer life styles and personality differences to determine variances
in buyer demands. For example, the insurance companies market

differently to swingers (i.e. young, unmarried, active fun loving party
going people etc, fast- paced (hedonistic living) than to “Plain Joes”
(Older, Married family centered people).
Usefulness of psychographic Segmentation:
(1) Projecting behaviour: - By identifying a customer segment and
understanding why its members are interested in making an insurance related
decision, it is possible to estimate the probability that they will react in a
certain way or at least predict several possible reactions.
(2) Client Interaction: - The process of psychographic segmentation allows
more effectivecommunication between a customer and the insurer as a more
meaningful dialogue withmore information flowing both ways.
(3) Anticipation of Future Market needs: - With valuable information
flowing in from customers, it will provide a better opportunity to analyse
future customer requirements. It will also help to provide a basis for
determining future insurance objectives.
(2) Segmentation by Life Cycle: - Hass and Barry in their book “Systems
selling of Retail Services” advocate the classification of financial
customers into household according to the stages in the life cycles.
There is ample evidence according to them that the financial needs and
expectations of households will vary according to stages in the cycle.
For example, young married couples with no children have the same
size household as older couples whose children no longer live at home.
The insurance needs of these two segments which an insurance marketer
should identify would tend to differ in certain respects.
(3) Social Class Segmentation- Insurers traditionally used purely
demographic information to analyse their customers and initially,

segmentation in insurance was basically along demographic lines.
Categories such as age, sex, education, income, family size and religion
were used. In fact, in some cases terms such as housewives, customers,
men, women, buyers, investors or savers were used casually, but it was
soon realized that this form of segmentation was very general and often
used as a matter of convenience.
2.1.12 Growth rate of insurance industry in India
In FY15, the insurance industry is witnessing a growth rate of around 12-
13%.Some of the drivers for growth in Insurance market in the next fiscal are -
‘Make in India’ initiative, investment in infrastructure, smart cities initiative and
increased consumption. These initiatives are likely to result in increased number
of projects that are likely to come up, increased trace activity leading to growth
in marine, increased growth in automobile sales leading to growth in Auto
Insurance.
Good sentiment would also lead to increased travel both within and outside
India leading to buoyant travel insurance.
The implementation of the seventh pay commission, which will increase the
pay-scale and give more purchasing power to the Government employees would
also lead to more demand for automobiles, thereby contributing to growth in
auto insurance market. Insurance being a capital intensive business an increase
in FDI gives them the opportunity to invest to grow their business in India by
investing in developmental activities like channel development and digital
initiatives. With our PM’s ‘Make in India’ effort and other reforms, we see an
upsurge in the manufacturing sector which is proving to be a boon for the
growth of Property and Marine Cargo insurance. Also the stalled infrastructure
projects would finally kick off in 2016, thereby boosting the engineering

insurance sector as well. Additionally the environment concerns and related
actions will largely impact the growth of the auto industry and auto insurance
space.
The industry is on its way to development and a number of factors govern that
growth. Some of them are:
Significantly untapped latent potential: India’s insurance industry has
witnessed rapid growth during the last decade. Consequently, many foreign
companies have expressed their interest in investing in domestic insurance
companies, despite the Government of India’s regulation, which mandates that
the foreign shareholding limit is fixed at 26% for the life as well as non-life
insurance sectors. How can this potential be tapped efficiently? This report
analyzes the issues of the industry and suggests methods to overcome them.
Recent regulatory developments that govern the current market state: The
development of the insurance industry in India is likely to be critically
dependent on the nature and quality of regulation. Overall, the regulatory
environment is favourable and takes care that players maintain prudent
underwriting standards, and reserve valuation and investment practices. The
primary objective for the current regulations is to promote stability and fair play
in the market place. Our report details some major regulations by the IRDA as
well as those concerning ULIPS, IPOs, among others.
2.1.13 PESTLE Analysis
Political:
 Insurance business in rural and urban sector
 Capital requirement
 Renewal of registration

 Investment of funds outside India
 Power to investigation or inspection
INCREASED SERVICE TAX ON PREMIUM:
The imposition of service tax on the services provided by the insurers has been
increased significantly over past few years by the government.
ENDING OF GOVERNMENT MONOPOLY:
A great revolution in the insurance sector came in the year 1999 when IRDA
passed the bill, lifting all entry restrictions for private players and allowing
foreign players to enter the market with some limits on direct foreign
ownership.
INCREASE IN FDI LIMIT:
The hike in the insurance foreign direct investment (FDI) limit to 49 per cent
from 26 per cent has proved to be very beneficial for the insurance industry in
India. It has encouraged foreign investors to invest in Indian insurance industry.
FAVOURABLE REGULATIONS FOR RURAL INSURANCE:
To encourage insurance sector to increase its spread in rural India, government
has made regulations more favourable for rural people by decreasing the
amount of premiums, introducing new group insurance plans and various other
special plans for farmers.
Economic:
 Adequacy of capital
 Increased economic activity
 Interest rates

 Inflation rates
 Market related factors
 Customer satisfaction
INCREASE IN GROSS DOMESTIC SAVINGS:
The gross domestic savings of people in India have increased significantly, due
to which they are moving towards new ways of investing money for the future
benefits including various insurance plans. As compared to previous year
i.e.2007, the insurance industry thus expected to grow by about 40% during this
fiscal year, i.e.2008.
CONTRIBUTION TO COUNTRY’S G.D.P:
According to government sources, the insurance and banking services’
contribution to the country’s gross domestic product is 7% out of which the
gross premium collection by various insurance companies forms a significant
part.
ROLE IN GOVT. SECURITIES MARKET:
Insurance companies are fest emerging as one of the most prominent players in
the govt. securities market. The share of insurance companies in overall
investment in the G-sec market has more than doubled to 23% during 2007-08
from 9% during the previous fiscal year.
BIGGEST DOMESTIC PLAYER IN EQUITY MARKETS:
According to RBI’s annual report for 2007-08, the insurance companies
invested Rs. 35880 crore in the G-sec market, which is over 173.06% higher
than the Rs.13880 crore they invested in 2006-07. Thus insurers have emerged
as the biggest domestic institutional players in the equity markets.

Social :
 Population
 Lifestyle
 Educational level
 Level of earning
 Societal benefits
LOW INSURANCE COVERAGE:
In India insurance is considered as which is pushed upon the customers to buy.
People are unwilling to buy insurance due to lack of awareness.
INCREASE IN LIFE SPAN AND RISE IN ELDERLY POPULATION:
In India life span has increased over past few years due to which the elderly
population in India is rising day by day. To live a happy and independent life,
more no. of educated peoples is moving towards investing in insurance to
ensure a respectful and independent life even in old age.
UNCERTAINITY ABOUT LIFE:
Due to increasing no. of events of terrorist attacks in various parts of the
country, people have started viewing life as more uncertain. It has developed a
kind of fear factor in the minds of people leaving them more worried about their
family and kids. Due to this reason they are moving more and more towards
buying insurance policies in order to secure their family’s future.
CHANGING INDIAN PERCEPTION:
In India earlier people used to view insurance as a tax saving device or as a
method of investment. But, nowadays a great change in the perception has

come. People have started realizing the importance of getting insured. Now
more no. of people is viewing it as a transfer of risk for a good future.
CHANGE IN FAMILY SYSTEM:
Since past, joint family system was the most prevalent in all the stratus of
Indian society. At that time, in case of a man’s death, there were other people in
the family to take care of his wife and kids. But, with the passage of time, a big
change in our culture has come. More no. of people are moving towards nuclear
family system. In today’s scenario there is no one to help a widow and her kids
because everyone is busy with his/her family. In such a situation more no. of
people are opting for insurance to secure their spouse and children’s future.
INCREASE IN LIFE STYLE DISEASES:
Due to modernization, the life has become very fast. Many changes have taken
place in the life style of people, due to which a large no. of new life style
diseases have made their place in our country. Thus, more no. of people is
opting for health insurance etc to lead a better and more secured life.
Technological:
 Maintaining the database
 E-business insurance in India
AUTOMATION OF PROCESSES:
Nowadays, with advancement in technology the whole process of insurance has
become automated. Earlier it used to take 15days to 45days for the issuance of
policy documents. But, nowadays the whole process gets completed within 5 to
7 days.

INTERNET DRIVEN INFORMATION ERA:
With an increase in internet usage and its increasing spread, it has become
easier for people to get informed about everything at their home only. Now they
don’t have to waste time in gathering information before taking any financial
step. Every information is now a days is available on the net.
BUSINESS PROCESS MONITORING:
It has become easier fo0r people to track every event in a business process. It
has resulted in more transparency in every aspect of business processing.
Legal
Despite strong improvement in penetration and density in the last 10 years,
India largely remains an under-penetrated market. The market today is primarily
dependent on push, tax incentives and mandatory buying for sales. There is very
little customer pull, which will come from growing financial awareness and
increasing savings and disposable income. In the long run the insurance industry
is still poised for a strong growth as the domestic economy is expected to grow
steadily. This will lead to rise in per capita and disposable income, while
savings are expected to be stable.
Insurance growth drivers:
The demand for insurance products is likely to increase due to the exponential
growth of household savings, purchasing power, the middle class and the
country’s working population. Listed below, are the various underlying growth
drivers for India’s insurance industry:
-life industry

ing trends
-distribution i.e. increasing penetration through new modes of
distribution such as the internet, direct and telemarketing and NGOs
innovation
ent i.e. timely and efficient management of claims to
prevent delays which can increase the claims cost
products and expanding distribution channels
regulatory changes by the IRDA to promote
a competitive environment in both the life and non-life insurance sectors.
Environmental
The environmental liability risk (i.e. the financial risk associated with
environmental pollution and contamination).
The natural catastrophe risk (i.e. the risk of major damages in connection with
the occurrence of natural disasters, such as earthquakes, floods or other extreme
environmental conditions). Both these environment-related risks, as mentioned,
are characterized by the potential for catastrophic consequences. However, even
if they may share some common features, they are structurally different from
the standpoint of the insurer and, therefore, they deserve to be treated separately

in this report. After a brief overview (Part I) of the traditional functioning of the
insurance and reinsurance mechanisms and an introduction to the general
problems affecting the insurability of certain risks, Part II of this study deals
with the risk of liability for environmental pollution, taking into account both
factual and legal variables that may affect risk insurability. Environmental
liability risk, in fact, is highly influenced by the underlying legal and regulatory
framework. In this perspective, a theoretical discussion of the most relevant
features of an environmental liability regime is followed by a comparative
analysis of the policy choices already implemented in various legal systems
belonging to both the civil law and the common law traditions, as well as by the
evaluation of the most recent developments that are taking place.
2.1.14 Company Profile
Birla Sunlife Insurance Pvt. Ltd.
Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between
the Aditya Birla Group and Sun Life Financial Inc., a leading international
financial services organisation. The local knowledge of the Aditya Birla Group
combined with the expertise of Sun Life Financial Inc., offers a formidable
value proposition to customers. Sun Life Financial and its partners today have
operations in key markets worldwide, including India, Canada, the United
States, the United Kingdom, Hong Kong, Philippines, Japan, Indonesia, China
and Bermuda. Sun Life Financial Inc. had assets under management of over
US$ 386.82 billion, as on 31 March 2007. Sun Life Financial Inc. is a leading
performer in the life insurance market in Canada. BSLI in its five successful
years of operations has contributed significantly to the growth and development
of the life insurance industry in India. It pioneered the launch of Unit Linked
Life Insurance plans amongst the private players in India. It was the first player
in the industry to sell its policies through the Bank assurance route and through

the internet. It was also the first private sector player to introduce a pure term
plan in the Indian market. This was supported by sales practices, which brought
a degree of transparency that was entirely new to the market. The process of
getting sales illustrations signed by customers, offering a free look period on all
policies, which are now industry standards were introduced by BSLI.
Being a customer centric company, BSLI has invested heavily in technology to
build world class processing capabilities. BSLI has covered more than one and a
half million lives since inception and its customer base is spread across 100
cities in India. All this has assisted the company in cementing its place amongst
the leaders in the industry in terms of new business premium income. Birla Sun
Life Insurance (BSLI), one of the leading private life insurers in India today
announced the inimitable achiever, cricketer Kapil Dev as their corporate brand
ambassador. The cricketing supremo will be endorsing BSLI in all its marketing
initiatives. Birla Sun Life Insurance is a value
driven brand which has a national brand recall of 70 per cent. The objective of
appointing a brand ambassador is to grow its brand recall as it goes national in
its distribution reach and fuel business growth. As a brand ambassador, Kapil
Dev will play a key role in the brand and product marketing and promotional
activities. BSLI has always used an integrated marketing approach, which will
be strengthened further.
Birla Sun Life Insurance (BSLI), in its five successful years of operations, has
contributed significantly to the growth and development of the life insurance
industry in India. It pioneered the launch of unit linked life insurance plans
amongst the private players in India. It was the first player in the industry to sell
its policies through the banc assurance route and through the internet. It was the
first private sector player to introduce a pure term plan in the Indian market.
This was supported by sales practices which brought a degree of transparency

that was entirely new to the market. The process of getting sales illustrations
signed by customers and offering a free look period on all policies, which are
now industry standards, were introduced by BSLI. Being a customer-centric
company, BSLI has invested heavily in technology to build world class
processing capabilities. BSLI has covered more than a million lives since
inception and its customer base is spread across more than 1000 towns and
cities in India. All this has assisted the company in cementing its place amongst
the leaders in the industry in terms of new business premium income. The
company's current capital base is Rs.520 crore.
2.1.15 About the Aditya Birla Group
The Aditya Birla Group has a turnover close to Rs.38,000 crore (as on 31 March
2008) and is one of the largest business houses in India. It enjoys a leadership
position in all the sectors in which it operates. With over 75 business units
spanning the South East Asian belt, Africa, Canada and the UK among others, it
is reckoned as India's first multinational corporation. The group is anchored by
eight lakh shareholders, with a market capitalization of Rs.53, 400 crore. A US
$29 billion corporation in the League of Fortune 500, the Aditya Birla Group is
anchored by an extraordinary work force of 130,000 employees, belonging to
40 different nationalities. Over 60 per cent of its revenues flow from its
operations across the world.
The Aditya Birla Group is a dominant player in all its areas of operations viz;
Aluminium, Copper, Cement, Viscose Staple Fibre, Carbon Black, Viscose
Filament Yarn, Fertilisers, Insulators, Sponge Iron, Chemicals, Branded
Apparels, Insurance, Mutual Funds, Software and Telecom. The Group has
strategic joint ventures with global majors such as Sun Life (Canada), AT&T
(USA), the Tata Group and NGK Insulators (Japan), and has ventured into the
BPO sector with the acquisition of TransWorks, a leading ITES/BPO company.

2.1.16 About Sun Life Financial Inc
Sun Life Financial Inc. is a leading international financial services organisation
providing a diverse range of wealth accumulation and protection products and
services to individuals and corporate customers. Tracing its roots back to 1865,
Sun Life Financial and its partners today have operations in key markets
worldwide, including Canada, the United States, the United Kingdom, Hong
Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of 31
March 2008, the Sun Life Financial group of companies had total assets under
management of US$ 343 billion. Sun Life Financial Inc. trades on the Toronto
(TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker
symbol "SLF".
Parent Company
Aditya Birla Group & Sun Life Financial Services
Category
NBFC
Sector
Insurance Services
Tagline/ Slogan
‘Zindagikeutarchadavmeijiyovishwaskesaath’; Leaving nothing to chance
USP
Expertise in Insurance across Continents
STP
Segment - Personal and Group Asset Management
Target Group - Urban and Rural Investors
Positioning - Complete Insurance and financial solutions
Competition
Competitors

1. LIC
2. SBI Life Insurance
3. HDFC Standard Lif
2.1.17 Vision And Mission
Vision
To be a world class provider of financial security to individuals and corporate
and to be amongst the top three private sector life insurance companies in India.
Mission
To be the first preference of our customers by providing innovative, need based
life insurance and retirement solutions to individuals as well as corporate. These
solutions will be made available by well-trained professionals through a multi-
channel distribution network and superior technology. Our endeavor will be to
provide constant value addition to customers throughout their relationship with
us, within the regulatory framework. We will provide career development
opportunities to our employees and the highest possible returns to our
shareholders.
2.1.18 Product Profile
Insurance Plans
Life is unpredictable. But in face of adversity, our responsibilities towards our
parents, children and loved ones need not be compromised. Insurance planning
equips respondents to smooth out the uncertainties and adversities that life
might send their way, so that the best that life has to offer, secure in the
knowledge that their beloved ones are well provided for.

BSLI offers a complete range of insurance products
Protection plans
BSLI offers Life Guard - a set of pure protection plans. Choose from amongst
three different product structures to insure their life and provide total security
to their family, at a very affordable cost.
o On death the entire sum assured will be paid.
o On maturity, all the premiums paid will be returned.
o No survival or maturity benefits.
o Respondents can also enhance the above two policies by adding
Accident & Disability Benefit Rider and Waiver of Premium Rider (WOP).

- Single premium:
o No survival or maturity benefits.
SAVINGS PLANS
BSLI offers a variety of policies that give respondents the benefits of
protection and the opportunity to save for important assets or events, like a
home, a car or a wedding.
Invest Shield Cash
A regular premium unit-linked insurance plan with an assurance of Capital
Guarantee with the added advantage of flexible liquidity option. An ideal plan
for long term planning with the benefit of liquidity.
The key features of the plan are:
multiple of the annual premium. Respondents can also choose the term of the
plan.
is paid. On death, Sum Assured along with the higher of value of units or the
guaranteed value is payable.
from the 6th policy year onwards till the end of
the policy term. Every year withdraw up to 10% of the value of units.
paid along with the death or maturity benefit.

onal insurance for 10 years after the maturity, for an amount of 50% of
the Sum Assured.
-up facility.
lity to increase / decrease their annual premium amount
Automatic Premium Payment- With this facility respondents can
take a temporary break from premium payment.
upfront.
invested premiums
(premiums net of all charges) along with the declared bonus interests.
With Automatic Premium Payment facility, respondents can avail a temporary
break from premium payment for a maximum of 1 year. This facility is
available once if the premium paying term is less than 15 years and twice, if it is
15 years or more. Respondents can also enhance their policy by adding
Accident & Disability Benefit Rider , Waiver of Premium Rider and Critical
Illness Rider .
Invest Shield Life
A regular premium unit-linked insurance plan with an assurance of Capital
Guarantee. An ideal plan for their long-term savings and protection
requirement
The key features of the plans are
are

the Sum Assured.
-up facility.
lity to increase / decrease their annual premium amount
- With this facility respondents can
take a temporary break from premium payment.
upfront.
The guaranteed value of the unit fund is the value of all invested premiums
(premiums net of all charges) along with the declared bonus interests. With
Automatic Premium Payment facility, respondents can avail a temporary break
from premium payment for a maximum of 1 year. This facility is available once
if the premium paying term is less than 15 years and twice, if it is 15 years or
more. The capital guarantee is applicable only on the invested premium and the
declared bonus interests.
Invest Shield Gold
A unit-linked insurance plan with an assurance of Capital Guarantee which
offers respondents the benefit of a limited premium payment term. An ideal
plan for protection with wealth creation that offers the flexibility of a limited
premium paying term.
xibility to choose a premium payment term of 5, 7 or 10 years for a
maturity term of 10, 15 or 20 years respectively.
multiple of the annual premium.

guaranteed value* is paid. On death, Sum Assured along with the higher of
value of units or the guaranteed value is payable.
nitial annual premium are
the policy term. Every year withdraw up to 10% of the value of units
investment with the help of the top-up facility.
upfront.
of all invested premiums
(premiums net of all charges) along with the declared bonus interests.
The capital guarantee is applicable only on the invested premium and the
declared bonus interests. Respondents can also enhance their policy by adding
Accident & Disability Benefit Rider and Critical Illness Rider.
Premier Life
Presenting Premier Life – The Preferred plan for the Preferred Customer. The
key features of the plan are:
premium paying term.
of 1 and a maximum multiple of 25 times the annual contribution.

ion of units on a periodic basis.
-up their investment any time respondents have surplus funds.
among four funds, based on their investment objective and risk
appetite.
e switches every policy
year).
Lifetime
Presenting Life Time – unit –linked plans that meets their changing needs over
a lifetime. These solutions have been developed to meet their savings,
protection and investment needs at every stage in life.
Protection:-
II).
decrease their sum assured.
-on riders to protect respondents against any eventuality.
Savings :-
ity to increase or decrease their contribution.
temporary break in the payment of annual contribution (available only with Life
Time).

if there is a temporary break in the payment of annual contribution
-up their investment any time respondents have surplus funds.
location of units on a periodic basis.
Investment:-
among four funds, based on their investment objective and risk
appetite.
year).
Respondents can also enhance your policy by adding Critical Illness Rider,
Major Surgical Assistance Rider, Accident & Disability Benefit Rider, Accident
Benefit Rider (available only with Life Time) and Waiver of Premium Rider.
SECURE PLUS
An insurance plan that gives added protection, savings and multiple options, all
in one
respondents premium contribution.
assured) for the same amount of total annual contribution.
he flexibility of receiving their maturity proceeds as a lump sum or in equal
annual installments over 3 or 5 years.

Respondents can also enhance their policy by adding Variety of Riders.
Cash Plus
An insurance plan that gives respondents added protection, savings, multiple
options, plus the power of liquidity.
their premium contribution.
assured) for the same amount of total annual contribution.
een the three levels of cover, as respondents
require.
he flexibility of receiving their maturity proceeds as a lump sum or in equal
annual instalments over 3 or 5 years.
e accumulated value of their
policy, after the first 5 policy years.
Respondents can also enhance their policy by adding Variety of Riders.
Save n Protect
An ideal plan for those who want to accumulate funds on a regular basis while
enjoying insurance protection.
nefits

Respondents can also enhance their policy by adding Critical Illness Rider
Major Surgical Assistance Rider , Accident & Disability Benefit Rider , Waiver
of Premium Rider (WOP).
CHILD PLANS
As a responsible parent, respondents will always strive to ensure a hassle-free,
successful life for their child. However, life is full of Uncertainties and even the
best-laid plans can go wrong. Here’s how respondents can give their child a
100% safe and assured tomorrow, whatever the uncertainties. Smart Kid is
especially designed to provide flexibility and safeguard their child’s future
education and lifestyle, taking all possibilities into account.
Choose from amongst a basket of 4 plans:
Kid regular premium
-linked regular premium
-linked regular premium II
-linked single premium II
All these plans offer:
Total peace of mind, even if respondents are not around

Accident & Disability Benefit Rider and Income Benefit Rider.
Respondents can also an Accident Benefit Rider to a Smart Kid Regular
Premium policy, and a Waiver of Premium Rider (WOP) to Smart Kid unit-
linked regular premium policy.
INVESTMENT PLANS
Life link II Life Link II is a unique plan that combines the security of a life
insurance policy with the opportunity of enjoying high returns on their
investments, without the market risks compromising on the protection of their
family!
Death Benefit:
The Sum Assured under the product has 2 options, either 500% of the initial
premium or 105% of the initial premium. In the event of an unfortunate death,
the beneficiary will receive higher of the value of units or the initial death
benefit, less any withdrawals.
Withdrawal Benefit:
One can make partial withdrawals from the accumulated value of the policy
after completion of one policy year.
Flexibility:
Choose from four fund options, based on their investment objective and risk
appetite. If at a later stage their financial priorities change, respondents can
switch between the various fund options, absolutely free, 4 times a year.

RETIREMENT PLANS
Life Expectancy has been rising rapidly and today respondents can expect to
live longer than their earlier generations. For respondents, this increase will
mean a longer retirement life, stretching into a couple of decades. BSLI
Retirement Solutions that combine the best of insurance and investment. These
solutions are developed to ensure their peace of mind for the years to come.
1. Why plan for retirement?
2. How much should I set aside for retirement?
3. The impact of inflation on respondent’s retirement savings
4. Why plan early?
5. About Annuitie
1.Why plan for retirement?
For too many people, the joy of retirement after years of hard work is eclipsed
by the financial uncertainties that it brings. Despite all the planning and saving,
respondents can never sure whether your money will last a lifetime. Retirement
planning offers a way to ensure a more enjoyable, stress free tomorrow. A
prudent plan will ensure that increasing life expectancy, higher inflation and
increasing taxes do not eat away into their hard earned savings.
2.How much must I set aside for retirement?
To ensure a comfortable retired life, respondents would be wise to invest money
into additional avenues like pension plans. How much respondents need to
invest can be answered by answering some questions such as:
1. How long do you have to save that amount before retirement?

2. Where can you invest your retirement money?
3. How much risk are you willing to take on your investments?
GROUP SOLUTIONS:
In an era of competitive parity, the only asset that makes a decisive difference
between corporate success and failure is the quality of human capital. Employee
benefits have proven to be an excellent tool to optimize the retention of talent
and improve an organization’s bottom-line. The quality of an organization’s
employee benefits establishes and maintains a company's image as a caring
employer. Optimum care of employees is a long-term investment that results in
a sustained competitive advantage for an organization in the times to come.
BSLI Group Solutions Advantage
flexible benefits.
profitability of the portfolio.
or their employee that takes care of his/her
changing financial needs at every stage of life.
superlative operational efficiency.
GROUP TERM ASSURANCE:
BSLI flexible group term solution helps provide affordable cover to members of
a group. The cover could be uniform or based on designation/rank or a multiple
of salary, and can be extended to all employees between the ages of 18 and 65

years. The benefit under the policy is paid on the event of the member’s death to
the beneficiary nominated by the member. It is a one-year renewable policy
where one master policy covers all proposed employees comprising the group,
with a minimum group size of 25 persons. New members can join the group and
outgoing members can leave the group at any point during the policy term.
RURAL PLANS:
BSLI Rural Products are designed to meet the needs of the rural consumers.
These products offer the following features:
PLANS FOR NRI’S
Being away from India doesn't mean respondents have to compromise the safety
and security of their loved ones. In fact, their savings from their time overseas
can be easily canalized to meet their family's needs - now and in the future. So,
whether it’s their dream to retire in their hometown; to secure funds for their
children's education; or to build assets, BSLI has a range of solutions that can be
customized to meet their needs.
2.1.19 Products of Birla sun life insurance
The products of BSLI may be mentioned as below:
Protection Solutions
1.BSLI Protector Plan

2.BSLI Protector Plus Plan
3.BSLI Premium Back Term Plan
Retirement Solutions
1.BSLI Classic Life Plan
2.BSLI Immediate Income Plan
3.BSLI Dream Life Plan
4.Health and Wellness Solutions
BSLI Health Plan
1.BSLISaral Health Plan
2.BSLI Universal Health Plan
Children’s Future Solutions
1.BSLIBachat Child Plan
2.BSLI Dream Child Plan
3.BSLI Classic Child Plan
Wealth with Protection Solutions
1.BSLI Foresight Plan
2.BSLI Money Back Plus Plan
3.BSLI Dream Endowment Plan
4.BSLIBachatMoneyback Plan
5.BSLI Vision
6.BSLI Classic Endowment Plan
7.BSLI Guaranteed Bachat Plan
8.BSLI Wealth Max Plan
9.BSLI Rainbow
Rural Solutions
1.BSLIBimaDhanSanchay
2.BSLIBimaKavachYojana
3.BSLIBimaSuraksha Super

NRI Solutions
1.BSLI Vision
2.BSLI Platinum Advantage Plan
Group Solutions
1.Gratuity: Group Value Plus Plan, Group Unit Linked Plan, and Guaranteed
Interest Credit
2.Leave Encashment: Group Unit Linked Plan, Group Value Plus Plan, and
Guaranteed Interest Credit
3.Affinity: Credit-Guard Mortgage Plans, and Group Asset Assure
4.Employer Employee: Employees Deposit Linked Insurance Scheme, and
Employer Term Insurance.
Protection solutions:
Secure your family’s future in this increasingly uncertain world and don’t leave
their dream to fate.
BSLI Protector Plus Plan
A plan that assures financial security for your family while keeping pace with
your growing needs, and rewards you for a healthy lifestyle.
BSLI Future Guard Plan provides complete financial freedom even when
respondents are not around, so that their loved ones live comfortably.
BSLI EasyProtect Plan
Respondent’s life responsibilities might either be escalating or have been
steady. Protect their family against the extra liabilities of life by choosing the
plan option best suitable for their needs.

2.1.20 ORGANIZATIONAL CHART (OR) STRUCTURE:
BOARD OF DIRECTORS
Mr. Kumar M Birla
h
INVESTMENT COMMITTEE

Chief executive officer- Mr. Pankaj Razdan is the MD & Chief Executive
Officer at Birla Sun Life Insurance (BSLI). He has rich experience in the
financial services business, across various functions and multiple lines of
business. He has been with the Aditya Birla Financial Services Group (ABFSG)
since 2007, as a co-owner of the ABFSG Vision and the Deputy Chief
Executive – Financial Services, a position he continues to hold. At ABFSG,
Pankaj has steered some of the key financial services verticals successfully
despite the challenging times.
Chief financial officer- Mr. Amit Jain is Chief Financial Officer (CFO) at Birla
Sun Life Insurance (BSLI) overseeing the Finance, Accounts and Taxation
functions.
Amit brings two decades of experience in finance, planning and strategy. He has
spent close to 10 years in BSLI. His sharp business acumen have lent immense
success to the planning and finance functions that he has spearheaded.
Mr. Vikas Seth is Chief Distribution Officer (CDO) at BSLI. He is a qualified
Electronics & Electrical Communication Engineer and has completed a Masters
Degree in Business Administration (Marketing). He joined BSLI in January
2008.
Chief design officer Currently at BSLI, Vikas is responsible for Direct Sales
Force, Bancassurance and Corporate Agency and Broker channels.
Vikas has a strong professional experience of over 17 years in diverse industries
including Telecom, FMCG and Life Insurance. He has worked with
organizations like Essar Telecom (Vodafone), Amway, ICICI Prudential and
HDFC Life in the past. His expertise is in start-up, building distribution,
implementation of sales & marketing strategies. He has played an important role
in building BSLI's distribution capabilities.

Head of sales- A sales manager plays a key role in the success and failure of an
organization. He is the one who plays a pivotal role in achieving the sales
targets and eventually generates revenue for the organization.
Branch heads:
 Direct all operational aspects including distribution operations, customer
service, human resources, administration and sales
 Assess local market conditions and identify current and prospective sales
opportunities
 Develop forecasts, financial objectives and business plans
 Meet goals and metrics
 Manage budget and allocate funds appropriately
 Bring out the best of branch’s personnel by providing training, coaching,
development and motivation
 Locate areas of improvement and propose corrective actions that meet
challenges and leverage growth opportunities
 Address customer and employee satisfaction issues promptly.
Senior Agency manager:
 To recruit team of Insurance Advisors as per the corporate strategy
 To ensure and maintain levels of productivity as prescribed
 To focus on and develop various business segments as per the sales
strategy
 To train IAs with the help of training team
 To uphold the brand image and ensure compliance with all internal as
well as external regulations.

Zonal manager-
 Handling a team of more than 50 responsible for the effective
functioning of branches
 Branch administration, distribution, channel management in multi
channel environment,
 Dealer and distributor management, local marketing activities
 Directly responsible to deliver sales growth as per the organization’s
objectives
 Handle large turnover and therefore commercial skills and business
acumen of high level is required.
Business development manager:
 Identifies trendsetter ideas by researching industry and related events,
publications, and announcements; tracking individual contributors and
their accomplishments.
 Locates or proposes potential business deals by contacting potential
partners; discovering and exploring opportunities.
 Screens potential business deals by analyzing market strategies, deal
requirements, potential, and financials; evaluating options; resolving
internal priorities; recommending equity investments.
 Develops negotiating strategies and positions by studying integration of
new venture with company strategies and operations; examining risks
and potentials; estimating partners' needs and goals.
Insurance advisors:

 Develops base for long-term sources of clients by using referrals,
occupational, and special-interest groups to compile lists of prospects.
 Approaches potential clients by utilizing mailings and phone solicitation;
making presentations to groups at company-sponsored gatherings;
speaking publicly to community groups on the subject of financial well-
being.
 Determines clients' particular needs and financial situations by
scheduling fact-finding appointments; determining extent of present
coverage and investments; ascertaining long-term goals.
 Developes a coordinated protection plan by calculating and quoting rates
for immediate coverage action and long-term strategy implementation.
 Obtains underwriting approval by completing application for coverage.
Completes coverage by delivering policy; planning future follow-up
visits and evaluations of needs.
MANAGEMENT TEAM
Mr. Vikram Mehmi Mr. Mayank Bathwal
President & Chief Chief Financial Officer
Executive Officer
Mr. Mario Braganza Mr. E.N. Goveia
Chief Operating Officer Head - Direct Sales Force
Mr. Amit Punchhi Mr. Bhavesh Sanghvi
Senior Vice President Head - Group Life &
Third Party Distribution Pension
Mr. Snehal Shah Ms. Anjana Grewal

Senior Vice President - Senior Vice President –
Operations Marketing & Communications
Mr. Rajesh Bhojani Mr. K H Venkatachalam
Senior Vice President - Vice President - Human
DSF Expansion Resource
Mr. Fabien Jeudy Mr. Lalit Vermani
Vice President, Chief & Vice President –
Appointed Actuary Compliance
Mr. Melvyn D'souza Mr. Vikram Kotak
Vice President - Risk Vice President –
Management and Investments Internal Audit
Mr. Bhalachandra Nayak
Vice President – Strategy

Organizational Structure
C.E.O (Chief executive officer)
C.F.O (Chief financial officer)
C.D.O (Chief design officer)
H.O.S (Head of sales)
Z.M (Zonal manager)
R.M (Regional manager)
T.M.S (Territory manager)
B.H (Branch heads)
B.D.M/B.P (Business development manager/Business partners)
S.A.M (Senior agency manager)
A.M (Agency Manager)
A.A.M (Assistant agency manager)
I.A (Insurance Advisor)
Fig: organisational structure of Birla Sun Life Insurance

2.1.21 SWOT Analysis
 .
SWOT Analysis Of Birla Sunlife Insurance
Strength
 Has Network of 600 branches and advisors spread over 1500 towns in
India having over 130,000 advisors
 Backed By Aditya Birla Brand and Sun Life financial services
 Emphasis on Customer Satisfaction through Transparent Functioning
 Strong Capital Base.

 Multi-channel distribution and one of the largest distribution networks in
India.
 Implementing Six-Sigma process.
 Customer centric products and services.
 Superior investment and risk management framework
 1 Million Policies sold within 3 and half years.
 Company has maximum number of MDRT as well as good number of
HNI
advisors.
 Training process of the company is very strong.
 Different plan for different peoples.
 According to the change in surrounding environment like changes in
customer requirement.
Weakness
1. Low Presence in Rural Market
2. Lesser advertising as compared to competitors
➢COMPANY does not penetrate on the rural market at a time.
➢There is no plan for the low income group.
➢Fees for the advisor is high than the other company.
Opportunities
1.Growing potential in the Rural Market
2. Alignment with Government Schemes
3. Better awareness amongst people for getting insurance
 Insurance market is very big, where company can expand its
horizon in insurance industry

 Though good investment and insurance it is easy to top Indian
customers.
➢The huge insurance market (77%) is left so company has opportunity to
expand our products.
➢To associate with the more number of HNI.
Threats
1.Economic crisis and economic instability
2. Entry of new NBFCs in the sector
 OLD HABITS DIE HARD’: It’s still difficult task to win the
confidence of public towards private company.
➢The company is facing major threats from LIC-which is an only
government company.
 Plans for all income groups are not available which can create
adverse effect later on the market share of the company.

Chapter 3

3.1 Research methodology
Research methodology is a strategy that guides a research in providing
answers to research questions and for this, research survey is being done.
“Accuracy of the study depends on the systematic application of the
method”. The researcher has to decide the method to be used that helps
him to get a desired direction in a systematic way. Research means a
search for knowledge or gain some new knowledge and methodology can
properly refer to the theoretical analysis of the methods appropriate to a
field of study or to the body of methods and principles particular to a
branch of knowledge.
Research Design
A research design is a framework or blueprint for conducting the
marketing research project. It specifies the details of the procedures
necessary for obtaining the information needed to structure and/or solve
marketing research problem. Conclusive research is designed to assist the
decision maker in determining evaluating and selecting the best course of
action to take in a given situation being the study descriptive in nature, it
will go through theoretical data collection, and its analysis of a survey
questionnaire. A research design is the arrangement of conditions for the
collections and analysis of data in a manner that aims to combine
relevance to research purpose with economy in procedure.
In this research I have used descriptive design for research.

Sample Unit The sample unit pertaining to the study is 100 respondents of
Bangalore region
Research Sampling Technique: convenient sampling
Research Sample Size: 100 respondents
TargetSample Choice: people who have bought insurance and people who are
keen on buying insurance.
3.2 Methods of data collection
Data collection
The word data means any raw information, which is either quantitative or
qualitative in nature, which is of practical or theoretical use. The task of
data collection begins after a research problem has been defined and
research design chalked out. While deciding about the method of data
collection, the researcher should keep in mind that there are two types of
data primary and secondary.
Primary data
This is those, which are collected afresh and for the first Time, and thus
happen to be original in character. There are many ways of data
collection of primary data like observation method, interview method,
through schedules, pantry Reports, distributors audit, consumer panel etc.
The Team Managers and employees of both the Department were
consulted to get information about procedure of both the online and off
line share trading. But the method used by us for the primary data
collection was through questionnaires.

Questionnaire method
For the collection of primary data I used questionnaire method. A formal
list of questions, which are to be asked, is prepared in a questionnaire and
questions are asked on those bases. There are some merits and demerits
of this method. These as under: -
1. Low cost even when universe is large.
2. It is free from bias of interviewer.
3. Respondents have proper time to answer.
4. Respondents who are not easily approachable can also be reachable.
5. Large samples can be made.
Secondary data
These are those data, which are not collected afresh and are used earlier
also and thus they cannot be considered as original in character. There are
many ways of data collection of secondary data like publications of the
state and central government, reports prepared by researchers, reports of
various associations connected with business, Industries, banks etc. And
the method, which was used by us, was with the help of reports of the
company.
3.3 Sampling design
Here I’ve chosen convenient sampling design.
It is a statistical method of drawing representative data by selecting people
because of the ease of their volunteering or selecting units because of their
availability or easy access. The advantages of this type of sampling are the
availability and the quickness with which data can be gathered. The

disadvantages are the risk that the sample might not represent the population as
a whole, and it might be biased by volunteers.
3.4 Statement of problem
Since too many competitors already existing in the insurance sector, it is
difficult to attract customers to buy insurance. This study is taken to understand
the impact of the advertisement towards the customers.
3.5 Research objectives
 To know the awareness of Insurance policies and Insurance
Companies.
 To understand the Consumer Buyer Behaviour for Insurance
Policies.
 To understand the role of advertisements in creating awareness
 To understand the impact of advertising on the sales.
 To conclude on the effect of advertising on sales
3.6 Plan of analysis
Initially a questionnaire was prepared .the sample size which I chose was of 100
respondents. The responses were collected through the questionnaire using
Google forms .After the responses were obtained a table was being made to
analyse the data. The responses of each individual was taken into consideration.
Looking from the responses obtained a pie chart was being made through which
the percentage ratios for the questions asked was determined…ie it showed
what percentage of people opt for Birla SunLife insurance products etc.

Chapter 4
Analysis & Interpretation

4.1Annual income of family
Analysis and interpretation
The objective of this question was knowing the annual income of the family.In
the survey conducted among 100respondents, it was found that 42.9% of them
2 - 4 lacs
4-6 lacs
6 & above
Annual income Number of
respondents
Total
percentage
2 lakhs – 4 lakhs 25 27.5%
4 lakhs – 6 lakhs 27 29.7%
6 lakhs and above 39 42.2%

were in the annual income group of 6 Lakhs & Above category,29.7% were in
4 lakhs – 6 lakhs category,27.5% of them were in 2 lakhs -4 lakhs category.
4.2 Occupation
Occupation Number of
respondents
Total percentage
Government employee 13 13.7%
Private employee 29 30.5%
Businessmen 20 21.1%
Others 33 34.7%
The objective of this question is to know the occupation of respondents
.By conducting a survey with sample size as 100 it was found that 13.7%
of the respondents were working under government sector as
employees,30.5% of them were working in an private companies,21.1%
Govt. Empy
privt empy
business
others

of them were sole businessmen and the remaining 34.7% constituted
other category i.e. students, retired officers and home makers.
4.3 To know if respondents had seen advertisements on insurance
People who have seen
insurance
advertisements
Number of
respondents
Total percentage
Yes 95 96.9%
No 5 3%
Total 100 100%
The objective of this question was to find out how many of them have
seen insurance advertisement. By conducting a survey on 100
respondents it was found that 96.9%of the respondents already have seen
Yes
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