SUMMER TRAINING PROJECT REPORT ON SELLING STRATEGIES ADOPTED BY AVIVA LIFE INSURANCE CO. LTD.

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELORS OF BUSINESS ADMINISTRATION (BBA) GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

TRAINING SUPERVISOR: ISHAN TANEJA B.S.A. VERTICALS

SUBMITTED BY: Vijay Thapa Enrollment No. 00514101709

SESSION 2009-2012 JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL, KALKAJI

Certificate Of Authentication
This is to certify that Mr Vijay Thapa, enrollment No. 00514101709, student of Jagannath International Management School pursuing Bachelors Of Business Administration, affiliated to Guru Gobind Singh Indraprastha University, has successfully completed the project titles Selling Strategies In AVIVA Life Insurance India Ltd. I hereby declare that the project report titled Selling Strategies In AVIVA Life Insurance India Ltd. Is my own work and has been carried out under the guidance of Mr Ishan Taneja (BSA Verticals Manager) AVIVA Life Insurance India Ltd. Ms Chania Dhall ( Program Coordinator) Jagannath International Management School, Kalkaji, New Delhi and it is an authentic work and has not been sourced through other means.

Ms Chania Dhall [Internal Project Guide]

ACKNOWLEDGEMENT
I wish to express my gratitude to my organizational guide and project in charge for his valuable guidance and providing me an opportunity to do this project. This project was a great source of learning and a good experience as it has made me aware of the professional culture and conducts that exists in an organization. I am highly obliged to Ms Chania Dhall(Internal Guide) from Jagannath Institution of Management School for providing me the right kind of opportunity and facility to complete this venture. Mr. Ishan Taneja(Head B.S.A. Vertical) of AVIVA life Insurance Ltd. Company. As my External Guide who helped me throughout my training and development program. I would like to express my innate sense of gratitude to my parents and friends who encouraged me a lot during the project and without their assistance and affection this project would not have been completed. It thanks them for being there. The help provided to me by the entire sales division of Aviva Life Insurance also obliges me.

Vijay Thapa 00514101709 Bachelors Of Business Administration Fifth Semester JIMS Kalkaji

PREFACE
The Insurance sector, after the opening up, provides greater opportunities. Several global players have emerged and the market has changed significantly. In the changed scenario, the expectation is that the low Insurance premium as a percentage of GDP prevailing in India will improve and will offer better opportunities to the insurance players. Life Insurance sector is one of the key areas where enormous business potential exists. In India currently the life insurance premium as a percentage of GDP is 1.3 per cent against 5.2 per cent in the US, but in the liberalized scenario, the life insurance premiums were projected to grow at around 18% to 20% from Rs 215 billion in 1998- 99 to Rs 592 billion in 2004-05 and to Rs 1450 billion by 2009-10. Corporate non-life premium was projected to grow from Rs 84 billion in 1998-99 to Rs 386 billion in 200910 and personal line non-life from Rs 4 billion to Rs 51 billion. In the life Insurance segment the Life Insurance Corporation of India (LIC) is the major player. The LIC has 2050 branches. It is constituted in to seven Zones. Currently there are 5, 60,000 LIC agents in India. General Insurance is another segment, which has been growing at a faster pace.

INDEX

CONTENTS

PAGE NUMBER

Chapter 1 Introduction 1.1- Overview of Insurance Industry 1.2- Profile of the Organization 1.3- Problems of the Organization 1.4- Competition Information 1.5- S.W.O.T Analysis Chapter 2 - Research & Methodology 2.1- Significance 2.2- Managerial usefulness of the study 2.3- Research objective 2.4-Scope of the study 48 2.5- Methodology Chapter 3 Conceptual Discussion Chapter 4 Data Analysis Chapter 5 Findings and Recommendations Annexure Bibliography

1 2 26 35 37 43 46 47 48 48 49 53 60 73 77 80

LIST OF TABLES
Serial No. 1 2 3 4 5 6 7 8 9 10 Table Title Age of respondent Qualification of respondent Occupation of respondent Average annual income of respondent Family size of respondent According to life insurance is Awareness of AVIVA life insurance Awareness regarding insurance % respondent who are under different plans of AVIVA prudential life insurance % of respondent benefits of choosing the particular products 11 % of disadvantages in insurance plan 12 % of respondent who want to invest in different venues Page No.

CHAPTER 1 INTRODUCTION

1.1

OVERVIEW OF INSURANCE INDUSTRY

A well development and evolved insurance sector is needed for economic development as it is provides long term funds for infrastructure development and the same time strengthen the risk taking ability. Life insurance is also now being regarded as a versatile financial planning tool in India. India being a country having a huge population of around one billion people with only 33.2% of the insurance population in India possessing life insurance. The country has a vast potential that has been left untapped till now. Therefore, what this has led to is the flooding of life insurance market with a number of private players which in collaboration with recognized foreign companys promises to deliver the best of services at the least price. All these companies are trying to grasp the maximum of market share in life insurance sector. For that they are developing a channel i.e. recruiting world-class insurance advisors/agents who sell their products or policies. But what a consumer needs or what he perceives about life insurance still needs to be answered these are some questions I have tried to answer in the project. This report is trying to give the detail about Consumer Perception about Life Insurance in India. Thus by going through the report one will get to know about the life insurance and the opinion in the mind of the consumer about his judgment and perceptions.

INSURANCE
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

INSURANCE AS A PRODUCT
Insurance is a contingent product whose utility is tested only in the event of an accident or a disaster. It always has a negative connotation in the mind of the buyerit deals with losses to the buyer. It is a product of future delivery and subject to benefit realization only on the occurrence of the contingent event. It is a technical product that has a lot of legal jargon and with numerous legal principles peculiar to it making it difficult to comprehend. It is a contingent financial promise made by the security provider and its benefit can be realized only after fulfilling a number of stipulations, often, unexplained at the time of commencement of contract. It is a product or service that has to be resold annually to the same buyer and hence personal relationship and mutual trust are essential. As with all service products it has limitations, whose import is highlighted only after the event. The fine print in the policy assumes a big role in the event of a claim.

Both the contractual parties have passive roles unless an unfortunate claim event of a claim. There is no emotional or psychological satisfaction in the purchase of insurance. It is a sense of relief. Since claim amounts vary substantially both the contractual parties are wary of each others interest , motives and actions. Experience of each customer is highly individualized with no standards to judge the performance and reputation of an insurer. Moral hazard on either side plays an important role in claim negotiation. Product innovations to keep abreast of changes in technology, political, economic, and social spheres provide a far wider market.

LIFE INSURANCE
One of the major types of insurance is life insurance. Life insurance companies sell life insurance, annuities and pensions products. Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. In most countries, life insurers are subject to different regulatory regimes and different tax and accounting rules. Insurance companies are generally classified as either mutual or stock companies. This is more of a traditional distinction as true mutual companies are becoming rare. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies.

Global insurance premiums grew by 9.7% in 2004 to reach $3.3 trillion. This follows 11.7% growth in the previous year. Life insurance premiums grew by 9.8% during the year, thanks to rising demand for annuity and pension products.

NEED FOR LIFE INSURANCE

As life insurance became more established, it was realized what a useful tool it was for a number of situations, including I) Temporary needs/ threats - The original purpose of life insurance remains an important element, namely providing for replacement of income on death etc. Typically in the case of the breadwinner dying an early death. II) Regular Saving - Providing for ones family and oneself, as a medium to long-term exercise (through a series of regular payment of premiums). This has become more relevant in recent times as people seek financial independence from their family. III) Investment - Put simply, the building up of savings while safeguarding it from the ravages of inflation. Unlike regular saving products, investment products are traditionally lump sum investment, where the individual makes a one-time payment. IV) Retirement - Provision for ones own later years becomes increasingly necessary, especially in a changing cultural and social environment. One can buy a suitable insurance policy, which will provide periodical payments in ones old age.

ADVANTAGE OF LIFE INSURANCE

(I) It is superior to a traditional saving vehicle

As well as providing a secure vehicle to build up savings etc, it provides peace of mind to the policyholder. In the event of untimely death, of say the main earner in the family, the policy will pay out the guaranteed sum assured, which is likely to be significantly more than the total premiums paid. With more traditional savings vehicles, such as fixed deposits, the only return would be the amount invested plus any interest accrued.

(II)

It encourages saving and forces thrift

Once an insurance contract has been entered into, the insured has an obligation to continue paying premiums, until the end of the term of the policy; otherwise the policy will lapse. In other words, it becomes compulsory for the insured to save regularly and spend wisely. In contrast savings held in a deposit account can be accessed or stopped easily.

(III)

It provides easy settlement and protection against creditors

Once a person is appointed for receiving the benefits (nomination) or a transfer of rights is made (assignment), a claim under the life insurance contract can be settled easily. In addition, creditors have no rights to any monies paid out by the insurer, where the policy is written under trust. Under the Married Womens Property Act (M.W.P Act), the money available from the policy forms a kind of trust which cannot be attached by judgment creditors.

(IV)

It helps to achieve the purpose of the Life Assured

If someone receives a large sum of money, it is possible that they may spend the money unwisely or in a speculative way. To overcome this, the person taking the policy can instruct the insurer that the claim amount is given in installments. (V) It can be encashed and facilitates quick borrowing: Some contracts may allow the policy to be surrendered for a cash amount, if a policyholder is not in a position to pay the premium. A loan, from certain policies, can be taken for a temporary period to tide over the difficult. Some lending institutions will accept a life insurance policy as collateral for a personal or commercial loan. (VI) Tax Relief

The policyholder obtains Income Tax rebated by paying the insurance premium. The specified forms of saving which enjoy a tax rebate, under section 88 of the Income Tax Act, include Life Insurance Premiums and contributions to a recognized Provident Fund etc., section 10 (10D) & other sub-sections of Section 80 of the Income Tax Act.

INSURANCE SECTOR IN INDIA Introduction

The insurance sector is of considerable importance to every developing economy; it inculcates the savings habit, which in turn generates long-term invest able funds for infrastructure building. The nature of insurance business ensures constant inflow of funds - the payout is staggered and contingency related - thereby making it readily available for investment on infrastructure building. Insurance is one sector whose contribution to GDP is quite significant. Post independence, the Indian Government nationalized the private life insurance companies with a view to raise funds for the infrastructure developments, which lagged behind pathetically. The scatter of general insurance companies was brought under one umbrella the General Insurance Company in 1972. Nationalization however brought with it the public sector bureaucracies, cumbersome procedures and inefficiencies but still these nationalized companies managed to have millions of policyholders who had no other options. Any attempt to even suggest private participation with a view to instill healthy competition and efficient services was only met with stiff resistance. While the early 90s brought forth liberalization on all major economic fronts, the insurance was left untouched. But before long, the passage of IRDA bill in 1999 paved the way for the liberalization of the Indian insurance sector.

History
Insurance is a federal subject in India and has a history dating back to 1818. Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the country's GDP while general insurance premiums to 0.65% of India's GDP. The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance company wanting to have a lion's share. Currently, the largest life insurance company in India is still owned by the government. Insurance in India has its history dating back till 1818, when Oriental Life Insurance Company was started by Europeans in Kolkata to cater to the needs of European community. Pre-independent era in India saw discrimination among the life of foreigners and Indians with higher premiums being charged for the latter. It was only in the year 1870, Bombay Mutual Life Assurance Society, the first Indian insurance company covered Indian lives at normal rates. At the dawn of the twentieth century, insurance companies started mushrooming up. In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed to regulate the insurance business. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. However, the disparage still existed as discrimination between Indian and foreign companies. The insurance sector went through a full circle of phases from being unregulated to completely regulated and then currently being partly deregulated. It is governed by a number of acts, with the first one being the Insurance Act, 1938.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of insurance to provide strict state control over insurance business.

Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that life insurance in India was completely nationalized, through the Life Insurance Corporation Act, 1956. There were 245 insurance companies of both Indian and foreign origin in 1956. Nationalization was accomplished by the govt. acquisition of the management of the companies. The Life Insurance Corporation of India was created on 1st September, 1956, as a result and has grown to be the largest insurance company in India as of 2007.

General Insurance Business (Nationalisation) Act, 1972

The General Insurance Business (Nationalisation) Act, 1972 was enacted to nationalise the 100 odd general insurance companies and subsequently merging them into four companies. All the companies were amalgamated into National Insurance, New India Assurance, Oriental Insurance, United India Insurance which were headquartered in each of the four metropolitan cities.

Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian insurance sector. The Govt. of India then introduced the Insurance Regulatory and Development Authority Act in 1999, thereby de-regulating the insurance sector and allowing private companies into the insurance. Further, foreign investment was also allowed and capped at 26% holding in the Indian insurance companies.

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Opening doors for private players and FDI

The insurance premium in India accounted for a mere 2% of GDP as against the world average of 7.8% and G-7 average of 9.2% during 90s. The insurance premium as a percentage of savings in India is 5.95% as compared to 52.5% in UK. The nationalised insurance companies could barely unearth the vast potential of the Indian population since the policies lacked flexibility and the Indian life insurance products are not linked to the contemporary investment avenues. LIC had a total premium income of $5 billion during 1995-96 and General Insurance recorded a net premium of $1.3 billion. LICs income has grown substantially on an average of 10% as against the industrys 6.7% in the rest of Asia. LIC has catered its services to more than 5 million people living below poverty line with a subsidized premium rate. Claim settlement ratio of LIC stood at 95% and GIC at 74% which much higher than the global average of 40%. But the other side of the coin gives a dismal picture. Large-scale operations and bureaucracies entangled in the public sector companies were the main areas of concern of the nationalized insurers. The state owned insurance companies did not show any initiative to venture into the rural areas to sell crop insurance or any other personal insurance. Another area, which requires an in-depth study, is the pension segment. Indian demand for pension products will be huge keeping in mind the lack of a comprehensive social security system leading to an upward trend in the savings sentiments. But LIC despite its optimal performing abilities brought in pension premium only to the tune of $22 million. Hence innovative measures to convert the pension products into lucrative saving instruments became the need of the day by which the investors would be allowed to deploy funds before the annuities commence and to invest them in different schemes that would yield a relatively higher income. Another potential area insufficiently served was the health insurance and other personal insurance products such as householders, shopkeepers, personal accident, travel insurance 11

and professional indemnity covers, which constitute only 12 per cent of Indian general insurance premium. General Insurance Companys Mediclaim scheme served only 2.5% of the total population. The Indian health insurance products were not comprehensive in nature there was no cover against disability. More liberalised reforms are inevitably essential not only to drive the Indian economy towards an annual growth rate of 7% to 8% but also to sustain the growth. A faster growth would attract foreign direct investment (FDI) inflow of $10 billion every year as against the current FDI in the range of $3 billion. Given the saving scenario in India, there is much more growth potential and the liberalised insurance sector will mobilise the long-term funds for infrastructural investments.

Factors changed due to privatization: (I) Market Expansion:

There has been an overall expansion in the market. This has been possible due to improved awareness levels thanks to the large number of advertising campaigns launched by all the players. The scope of expansion is still unlimited as virtually all the players are concentrating on large cities and towns-except by LIC to an extent there was no significant attempt to tap the rural markets but the private companies are also targeting the untapped rural market.

(II) New Product Offerings:

There has been a plethora of new and innovative products offered by the new players, mainly from the stable of their international partners. Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders

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from which they can choose. More customers are buying products and services based on the true needs and not just traditional money-back policies, which is not considered very appropriate for long-term protection and savings. However, there are still some key new products yet to be introduced.

(III) Customer Service:

Not unexpectedly, this was one area that witnessed the most significant change with the entry of new players. There is an attempt to bring in international best practice in service and operational efficiency through use of latest technologies. Advice and need based selling is emerging through much better trained sales force and advisors. There is improvement in response and turnaround times in specific areas such as delivery of first policy receipt, policy document, premium notice, final maturity payment, settlement of claims etc. However, there is a long way to go and various customer surveys indicate that the standards are still below customer expectation levels.

(IV) Channels Of Distribution:

Till two years back, the only mode of distribution of life insurance products was through Agents. While agents continue to be the predominant distribution channel, today a number of innovative alternative channels are being offered to consumers. Some of them are banc assurance, brokers, Internet and direct marketing. Though it is too early to predict, the wide spread of bank branch network in India could lead to banc assurance emerging as a significant distribution mechanism. If any one analyses the history of the growth of insurance since reforms, it is marked by all- round growth of all players. More or less all players (including the market leader LIC) have aggressively recruited and trained advisors, appointed agents, launched new products, improved customer service standards and revamped/expanded their distribution networks. If at all there are major difference between players it was only in time lag in launching of service. Every player will like the customers to believe that its service standards are the best or that its agents are the most informed and ethical, but it is

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debatable whether there are any significant differences. In other words, each company is trying to be everything to everybody. Our argument is that the strategy of being everything to everybody is risky. Some players justify the above strategy on the basis that the Indian market is huge and it can accommodate everybody. Still, in a market where it is difficult to distinguish one self sufficiently on services or on any other parameter to be able to change a premium, it will lead to unmitigated price competition to the detriment of all players. One may achieve sales turnover, but margins and profitability will suffer severely. In the insurance industry where large amounts of capital are required, this is risky. While there is room for a few scale players with a finger in every pie, it is profitable for other players to focus on different segments to survive and thrive in a multi-firm open environment. While each company has to choose its own unique positioning on its unique strengths, the below-mentioned generic positioning alternatives appear worth considering. Needless to say the positioning choices discussed here are not mutually exclusive and can be overlapping. Global investors prefer Indian insurance markets: Multinational insurers are keenly watching the transformation of the Indian insurance sector, mainly because the domestic markets have become saturated for the respective insurer. International insurers capture a significant part of their business from their multinational operations only. UKs largest life and non-life insurers acquired 40% to 60% of their total premium from their multinational operations. The foreign investors are finding the Indian market more attractive because even a small share of a growing market looks lucrative. The other reason as to why the global insurers are interested in investing their funds is the nature of the Indian markets. Generally insurance companies operate on the principle of spreading. Spreading the area of operations over a wide geographical area would eliminate sudden dips in earnings due to the unexpected risk spread. Sigma Report

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presented by the worlds second largest reinsurer Swiss Re on global insurance, reports complete saturation of international market.

Effects of global insurance

More job opportunities: Opening of the insurance sector to the foreign investors has led to a renaissance in the Indian economy. Job opportunities show bright signals. The people working in insurance sector in India are approximately the same as in the UK, which has 1/7th of Indian population. There is the new concept of bancassurance that has paved the way for more job opportunities in the financial sector. There would be demand for specialists in the area of marketing, finance and human resource management apart from the demand for technical expertise from professionals in the field of underwriting and claims management subjects. Inflow of foreign capital: There would be huge inflow of funds into the country with foreign capital splurging in the Indian insurance companies as start up capital. Indigenous reinsurance: Even the reinsurance sector looks for opulence with global players like Swiss Re and Munich Re keen on entering into the insurance industry in India. While there will be a deep fall in the outward reinsurance, India would receive inflow of funds from the neighboring countries. If the legislative support offers a congenial atmosphere, a la Lloyds in India is not far off. Technology transfer: Apart from the above monetary aspects, there would also be a revolution in the transfer of technologies and knowledge from the global participants in the fields of training, risk management, underwriting, introduction of new policies etc. With more participants in the market, there would be healthy competition with increased advertisement expenditure for brand building. There would be scientific pricing methods. In the liberalised insurance era, we have 14 life insurance players apart from the public sector Life Insurance Corporation of India and 9 general insurance companies apart from the 4 state owned companies viz. The United India Insurance, New India Assurance, Oriental Insurance, National Insurance Company. The private insurers have already

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proved their success by way of performance during the current financial year by way of 71% growth in the premium income. The investors worldwide are keeping their fingers crossed pending the announcement of the increased cap in the FDI investment in the Indian insurance companies to 49% from 26%. There are two legislations that govern the sector-

The Insurance Act- 1938

The IRDA Act- 1999.

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HISTORICAL PERSPECTIVE
In 1818 it was conceived as a means to provide for English Widows. The Bombay Mutual Life Insurance Society started its business in 1870.

It was the first company to charge same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880.

Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India.

By 1938 there were 176 insurance companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. The insurance business grew at a faster pace after independence.

The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. 17

 Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization.

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IMPORTANT MILESTONES IN THE LIFE INSURANCE BUSINESS IN INDIA:

INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognising that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included: 19

i ) Structure: Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. ii) Competition: Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body: The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent iv) Investments: Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time) v) Customer Service: LIC should pay interest on delays in payments beyond 30 days. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and Development Authority. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in

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April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products.

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PRESENT SCENARIO
The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 15 life insurance companies have been registered. A host of private Insurance companies operating in life segments have started selling their insurance policies since 2001. Table shows the current market players in the life Insurance Industry (Source IRDA).

LIFE INSURANCE SCENARIO IN INDIA

Since 1956, with the nationalization of insurance industry, the state-run Life Insurance Corporation of India (LIC) has held the monopoly in countrys life insurance sector. General Insurance Corporation of India (GIC), with its four subsidiaries, was its counterpart in the casualty sector. Over the time, taking advantages of its monopoly and virtual prerogative in establishing premiums, LIC has evolved into a monolith. With around 60,000 agents in every nook and corner of the vast country, it has created an enviable brand name, particularly among the rural population of the country. It has around $40 billion as its financial sector. However, on the qualitative side, it has every little to take pride in. And there lies the potential for players to challenge this behemoth. As is typical with monopolies, the premium rates charged LIC are among the highest in the world, and its track record in customer service can at best be called shabby. With a huge unionized, rigid workforce mostly in the clerical category, LIC run the risk of high fixed cost, which will be the deciding factor productivity in the competitive scenario.

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While boasting full-scale automation of its operation, the truth is that its technology is outdated. The new players, with the state-of-the art technology under the belt, will be in advantageous position. 80% of LICs business is procured by 20% of its ill-trained agent force. The foreign player, with the domestic partners string band value, can test the unconventional distribution channels like brokers, the Internet, the banking distribution system etc., although foreign players may be tempted to keep their operations in big cities for the cream layer of the society, the real market lies in rural India, which accounts for the lions share of LICs present business.. The foreign companies need to know the ground realities to the details.

PRIVATIZATION OF INSURANCE
The Indian Insurance sector has finally opened up and it is with much anticipation that new players are awaiting their share of market. License have been issued to both Indian and foreign players- Reliance, HDFC-Standard Life, Max India-New York, Royal Sundaram Alliance, Bharti Axa Life Insurance, IFFCO-Tokyo Marine, Bajaj Allianz, Birla Sun life, Tata AIG, AVIVA Life Insurance, SBI Life, OM Kotak Mahindra are some of the entrants into the newly liberalized Indian Insurance market. Aviva Life Insurance and HDFC-Standard Life have issued their life policies-the first from the private sector after 45 years. The first move for the liberalization came with the Malhotra Committee Report in 1993 which recommended the privatization of insurance, setting of an insurance regulatory authority and restructuring the government monopoly LIC and GIC and its subsidiaries. IRDA Act passed in November 1999 had set ball rolling for the entry of private players in domestic sector.

IRDA
The insurance sector has been opened up in India, as there was an urgent need. The international experience indicates those country with a liberalized insurance sector have witnessed a rapid growth in premium volumes enhancing the domestic saving rate. This

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happened in China, Malaysia and Singapore where a competitive market has led to improvement in services and quicker settlement of claims. It is also important to note that competition will bring about advancement in information, communication and technology. And rightly therefore a decision was taken by the Government of India to open up insurance sector. The establishment of IRDA in the month of April 2000 has been important development in this direction, making the end of monopoly in the insurance. The IRDA Governs the critical aspect of insurance sector including: The number and role of Private sector operates including-Roman area intermediaries. Regulate covering investment, solvency norms etc. Product range. Accounting practices. Consumer protection norms. Ensuring the rural and health insurance are developed. Fixing of license fee. Perhaps of all the most critical regulation is the 26% equity Capital for foreign Insurers. This regulation bring in issues regarding management control and one of the reasons for joint venture breaking up Cubb-Kotak, Liberty-Dabur, All State-Dabur, Manu Life-UTI are some of the broken up alliances.

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LIBERALIZATION OF INSURANCE SECTOR

Liberalization commitment of the country to help in disciplining future economic policies will include the insurance reforms. When world over insurance market has been opened up. India cannot remain in isolation. History has shown that it is very difficult to prosper in isolation. Globalization is the new economic reality, which is here to stay, heralding a new era of insurance in India. With the opening of the insurance industry, India stands to gain with the following major advantages. Globalization will provide opportunities to the customer for the better production. With more reasonable and affordable pricing. The customer will get quicker services. It will enhance the saving rate. Long term funds for infrastructure development will be available to the country. It will secure for India larger inflow of foreign capital need to sustain our GDP growth.

ADVANTAGES OF LIBERALIZATION
With new insurance intermediaries and more distribution channels the market is bound to develop by leaps and bounds. In the next few years it is established that the Indian insurance sector will develop a better understanding of consumer requirement leading to more satisfaction of consumers.

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 The world class technology will be available in the market bringing about tremendous improvement in servicing. Choice of price will be available to the customers. Lead to increase in employment. Social and rural obligations will also be served as IRDA has come out with clear regulation in this regard, which makes the development in this area mandatory. Global competitors will help in building expertise with practice. Unlike west, in India, insurance is sold as the instrument of saving. About 18%of the policies are sold as death risk consideration. Impression about LIC is that they are not meant for the market requirements. They are only intended to find customers. Insurance awareness is therefore low. Unit linked insurance products are not available. Insurance covers are expensive and returns are low. Turn over the agent is high. The choice available to the insuring public is inadequate in terms of services, products and prices. These are the areas of weakness, which may act as opportunities for new players who may work to offer policies to the customer with the value additions at a competitive premium with much improved servicing.

INSURANCE IN INDIA
Only 22% of the insurance population has been extended cove r. Market penetration is low and the potential to exploit is high. Insurance premium per capita is very low. Lack of comprehensive social system benefit and welfare means that demand for pension products is high. Huge middle class of approximately 300 million.

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EXISTING INSURANCE COMPANY SCORE LOW ON CUSTOMER SERVICE FRONT

The insurance market registered growth in the Asian region even though Indias share in global insurance premium is less than 0.5% (1998) as compared to USA (24.2%) and Japan (21%). Studies have revealed that in an emerging market, as disposable income rises, Insurance premium as a ratio of GDP shoots up. The confederation of Indian Industry projected a growth of life insurance premiums from Rs. 350 billion at present to Rs. 140 billion. The growth of non-life insurance premium is expected to increase from 75 billion to 375 billion. Out of which, only 10% is tapped by the existing insurer. Insurance even more than banking is a volume game. A very exclusive approach in view is unlikely to provide meaningful numbers. Currently, insurance is bought for the purpose of tax-benefits. A higher percentage of business is in the rural market. The share of rural new business insurance total new business is 55% in terms of policies and 47% in terms of sum assured. However, this needs to be viewed in the light of some recent issues that have been raised regarding as to what constitutes the rural market. Therefore, private insurers will be best served by middle market approach, targeting the customer segments that are presently unexploited. How many Indians are aware that LIC has more than 60 products and GIC has more than 180 products. Not only there is a reduction in the premiums of life insurance products have long overdue since Indian mortality rate has decreased three folds in the last 50 years. There is also scope to increase the yield on life insurance policies (presently 6%) with proper risk management in place. It is been debated that insurance business does not produce profit in the first five years cross subsidization is a feature of Indian market. Even the first portfolio vote that is considered profitable, cross subsidizes the other departments. Tariff reduction is likely to reduce profits, further insurers have to institute proper claims management progress in order to extract efficiencies. At present life insurance business in the country is taxed at

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12.5% of the profit in financial year. The government is soon to present a new model of taxing life insurance companies at international rates. New entrants should be well advised to look ahead to the stage where brand strength will be a competitive advantage and sketch their alliances accordingly. In fact, we believe that alliance related to distribution rather than to products and technology will prove most valuable. The stages where brand strength will be competitive advantage and sketch their world accordingly. In fact we believe that alliance related to distribution rather than to produce or technology will prove most valuable in the long run. Banks and financial companies will emerge, as attractive distribution channel for this insurance trend will be led by two factors, which already apply in other world markets. First Banking food insurance, fund management and other financial services companies are being to increase their profitability and provide maximum value to their customers. Therefore, they are themselves looking for a range of products to distribute. In other market notably Europe; this has resulted in bank assurance. Bank entering into the insurance business in India to bank hope to maximize expensive existing network by selling a range of products more of a loss alliance between insurance and bank than a formal ownership. Some Indian entrants like Aviva, HDFC, Bharti Axa and reliance hope to ride their existing network and customer bases.

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1.2

PROFILE OF THE ORGANIZATION

Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. With a history dating back to 1696, Aviva has a 35 millioncustomer base worldwide. It has more than 332 billion of assets under management. In India, Aviva has a long history dating back to 1834. At the time of nationalisation it was the largest foreign insurer in India in terms of the compensation paid by the Government of India. Aviva was also the first foreign insurance company in India to set up its representative office in 1995. In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest Group of companies. A professionally managed company, Dabur is the country's leading producer of traditional healthcare products. In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share. With a strong sales force of over 12,000 Financial Planning Advisers (FPAs), Aviva has initiated an innovative and differentiated sales approach to the business. Through the Financial Health Check (FHC) Avivas sales force has been able to establish its credibility in the market. The FHC is a free service administered by the FPAs for a needbased analysis of the customers long-term savings and insurance needs. Depending on the life stage and earnings of the customer, the FHC assesses and recommends the right insurance product for them. Aviva pioneered the concept of Bancassurance in India, and has leveraged its global expertise in Bancassurance successfully in India. Currently, Aviva has Bancassurance tieups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 15 Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir, Bihar, West Bengal and Maharashtra and one regional Bank in Sikkim.

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When Aviva entered the market, most companies were offering traditional life products. Aviva started by offering the more modern Unit Linked and Unitised With Profit products to the customers, creating a unique differentiation. Avivas products have been designed in a manner to provide customers flexibility, transparency and value for money. It has been among the first companies to introduce the more modern Unit Linked Products in the market. Its products include: whole life (Life Long), endowment (Life Saver, Easy Life Plus), and child policy (Young Achiever) single premium (Life Bond and Life Bond Plus), Pension (Pension Plus), Term (Life Shield), fixed term protection plan (Freedom Life Plan) and a tax efficient investment plan with limited premium payment term (LifeBond5). Aviva products are modern and contemporary unitised products that offer unique customer benefits like flexibility to chose cover levels, indexation and partial withdrawals. Avivas Fund management operation is one of its key differentiators. Operating from Mumbai, Aviva has an experienced team of fund managers and the range of fund options includes Unitised With-Profits Fund and four Unit Linked funds: - Protector Fund, Secure Fund, Balanced Fund and Growth Fund. Aviva has 112 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in 378 towns and cities across India. Aviva is also keen to reach out to the underprivileged that have not had access to insurance so far. Through its association with Basix (a micro financial institution) and other NGOs, it has been able to reach the weaker sections of the society and provide life insurance to them. For three consecutive years in 2005, 2006 and 2007, Aviva has had relatively high scores on the parameters of Credibility, Respect, Fairness, Pride and Camaraderie in the survey administered by Grow Talent Company Ltd. along with Great Places to Work Institute, Inc. and Business World magazine.

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Source : avivaindia.com WHO IS AVIVA DABUR A professionally managed company, it is the country's leading producer of Founded in 1884, Dabur is one of India's oldest and largest group of companies with consolidated annual turnover in excess of Rs 1,899 crores. Traditional healthcare products. AVIVA Aviva is UKs largest and the worlds fifth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses

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elsewhere around the world. With a history dating back to 1696, Aviva has a 35 millioncustomer base worldwide. It has more than 332 billion of assets under management. VISION Aviva - where exceeding expectations through innovative solutions is "the" way of life This is the compelling vision that Aviva India has created through the active contribution of its employees. These lines not only define the way we live and work but also serve as a reminder to deliver the best to our customers, shareholders, colleagues, partners & employees at all times. Embedded in this vision are the core values of Integrity, Customer centricity, Passion for winning, Innovation and Empowered team that we have collectively defined and committed to working towards. PARTNERS

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Aviva is committed to helping our customers get 'Kal par Control' and make the most out of their lives. It is the constant endeavour to ensure that our customers have easy access to Aviva products and services at all times. Aviva has pioneered bancassurance in the country through its tie-ups with 22 leading private and nationalised Banks in the country. Aviva also focuses on bancassurance worldwide and has a proven track record of successful bancassurance relationships. It has 40 major partnerships with leading banks across the globe. Aviva is a leading bancassurer in countries such as France, Italy, Spain, Australia and New Zealand. ABN AMRO Bank ABN AMRO is a prominent international bank with European roots and a clear focus on consumer and commercial banking gaining a competitive edge on the chosen markets and

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client segments. ABN AMRO Bank (India) ventured into the Indian market in 1920 primarily to finance the diamond trading business and evolved by mid 1990s into a fastest growing retail bank and a well-respected wholesale bank. The Bank is recognized as one of the most successful consumer banking outfits in the county, known for its innovation and aggression. ABN India consumer banking pioneered the distribution of third party financial products like mutual funds, bonds and life insurance.

Aviva's relationship with ABN India commenced in June 2002 under which the bank introduces its customers to Aviva for insurance and provides access to its affluent customer base across the country through its operations in 21 branches at 14 locations. American Express Bank American Express Company is a diversified worldwide travel and financial services company founded in 1850. It is the worlds largest single card issuer, based on purchase volume generated of nearly 55 million cards worldwide. Present in India since 1921, American Express provides high quality travel related and financial services in India. Aviva Life Insurance entered into a strategic alliance with American Express for distribution of Life Insurance in June 2002 to offer top-of the line saving-cum-protection plans to Amex bank and card customers. Aviva offers tailor-made investment solutions to the high net worth clients of the Wealth Management channel. The retail card segment is being tapped through outbound calling to the Amex cardholders. The American Express Inbound call center also pitches Aviva products to its callers.

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The Lakshmi Vilas Bank Ltd The Lakshmi Vilas Bank Ltd, based out of Karur, is among the top private banks in India. It has 221 branches with a customer base of 1.2 million, across 10 states. Currently Aviva products are sold across 204 branches of LVB. Canara Bank Canara Bank is one of the largest retail banks in India with 2,513 branches spread across 25 States and 4 Union Territories. The customer base of Canara Bank exceeds 27 million. With a net profit of INR 1110 Crores, deposits of over INR 96,908 Crores, 47389 employees for the year ending Mar 2005, Canara Bank is truly a Bank to be reckoned with for the sheer magnitude of coverage it offers its clients. Canara Bank has tied up with Aviva as a Corporate Agent for its Life Insurance Products. Aviva products are currently offered in 1030 Canara Bank branches in 103 Cities. Punjab & Sind Bank Punjab & Sind Bank was established in the year 1908. Based on the principles of social commitment to the people, help the farmers, and the weaker sections of the society to raise their standard of living and play a significant role in the development of the country. Even after 96 years of its inception, Punjab & Sind Bank stands committed to honor the high ideals of its founding fathers. Punjab and Sindh Bank has a network of 759 branches and 132 extension counters all over the country with close to 9,765 employees. 42 per cent of its branches are in the rural and semi urban areas. In line with spirit of liberalisation the Bank has laid special emphasis on International banking, Hire purchase, Leasing, Tele-banking and Credit card facilities. The bank has also started their Rural Development Division, High Tech Agricultural Branches, Specialised Locker Branches, Industrial Finance and SSI branches, besides Housing Finance Branch for the convenience of its customers.

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Centurion Bank of Punjab Centurion Bank of Punjab is a new generation private sector bank offering a wide spectrum of retail and corporate banking products and services. It holds leadership positions in retail two-wheeler loans and commercial vehicle loans. It has been among the earliest banks to offer a technology-enabled customer interface that provides easy access and superior customer service. RBI has approved the merger between Centurion Bank and Bank of Punjab effective from October 1st, 2005. The merged entity, named Centurion Bank of Punjab, has a strong nationwide franchise of 241 branches and extension counters and 389 ATMs. With strengths in the retail, SME and agriculture businesses the bank is well poised to capture the opportunities that exist in the Indian market. The combined banks 3,500 employees will continue to provide support and an enhanced banking experience to our customers, as part of a bigger, stronger bank. Avivas key strength is its fund management capabilities with an experience of 30 years in money management.

EQUITY
The much-awaited correction finally materialised in the quarter ended June 2006. The BSE Sensex, which peaked at 12612 levels on 10th May 2006, has corrected to around 10000 levels. After three years of sustained Bull Run, the recent correction has been a timely reminder that the markets, in the short term, may see downsides too. Compared to the rise in the market, the downtrend has not been very large though it has been quicker than expectations. Even post this 20% or so correction from its peak, the Sensex is up 12.9% year to date. This much-needed correction has weeded out some of the euphoria and the focus on value is back. Does this correction reflect any change in the key fundamentals of India? We do not think so. The three-year rally was in the first place due to appreciation of Indias sustainable growth story. The second reason was an improvement in the global liquidity as investors appetite for risk iJhansieased. The India growth story remains intact and the GDP growth in the last few quarters is an evidence of this. We expect GDP to grow by over 7% on a sustainable basis and hence India would 36

continue to be an attractive investment destination. The major reason for the correction has been liquidity moving out of the markets. This has been caused by fall in the commodity prices from their peak, rising global interest rates and high crude prices causing worries about inflation and a global meltdown. With the tightening of global liquidity and reduced risk appetite of investors, there have been outflows from emerging markets including India. Secondly, valuations in India were among the highest in emerging markets and hence witnessed a greater compression. One of the major fears globally is that of a slowing economy in the US and China. India is highly resilient to global meltdowns as private consumption accounts for 62% of our GDP and exports account for only 12% of GDP. With a favourable demographic profile- iJhansieasing working population and improved disposable income in the hands of the consumer, this resilience will only improve. This coupled with superior growth and demographics will drive flows back to India in the long term. In the short term, the markets could continue to witness volatility as the direction would be determined by global liquidity, progress of monsoons and the quarterly results for June 2006. We believe, for the long-term investor, this correction would provide a good opportunity to participate in the India growth story. However, expectations of returns from equity should be moderate with stock returns tracking earnings growth. FIXED INCOME Is virtuous cycle turning vicious? Inflation has touched one year high of 5.44%, and INR has touched 2 year low of 46.04. Aligning with these movements, yield on benchmark 10 year Government Bond also went up to a four year high of 8.10%. The latest balance of payments numbers for 2005-06 show an overall balance of $15 bn, helped by a less-thanexpected deficit on the current account ($10.6 bn). This was essentially due to strong invisibles (private remittance and net software exports) providing cover for a trade deficit, which was itself moderated by a strong 28% y-o-y growth in exports. Net inflows on the capital account stood at $24.7 bn with $5.7 bn coming from net FDI and $12.5 bn being accounted for by portfolio inflows. Though headline inflation recently has picked up with prices of food and non food articles in the primary goods category rising, the

37

government has taken short-term measures in the form of liberalizing imports of wheat and sugar and banning exports of pulses in order to ease the supply situation. Core inflation, that is, excluding the more volatile primary and fuel categories, has picked up a bit in comparison to last year. However it is expected to remain in a manageable range. RBI seems committed to containing inflation and would thus act accordingly. Recently, RBI chose to iJhansiease rates to manage inflationary expectations and in response to various central banks hiking rates globally. This has led to a few banks raising lending rates in addition to getting reflected in the money and bond markets. GDP growth for 2005-06 came in at a better than expected 8.4%, propped up by improved agriculture performance. For 2006-07 also, despite inflationary pressures, the GDP is expected to grow at over 7%. Going forward, monetary tightness will weigh on the interest rate outlook and it is expected to remain firm.

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1.3

PROBLEMS OF ORGANIZATION

To determine customers level of satisfaction aspire plans with the quality of their transaction with Aviva Life Insurance. The biggest challenge faced by the Government today is that of a regulator with the prospect of about 30 or 40 players, each represented by thousands of agents, brokers and intermediaries. To evolve a free and fair method of assessing the companies, to ensure fair play between the competitors and to safeguard the interests of the largely uninformed customers are the main tasks ahead. The other and equally serious aspect is to ensure that the vast amounts collected by the insurance and pension funds are utilised for the welfare of the people. Though the Government itself would not be the guarantor of the policy monies, nevertheless, it is accountable through its regulatory mechanism, to put in place prudential norms of investment and accounting, revenue recognition, fair valuation of assets and liabilities, determining necessary margins towards any contingencies and proper reserves for shrinkage of investments will have to be made. Nevertheless, care has to be taken to see that there is not too much of control and regulation. A certain degree of autonomy in the functioning of insurance companies has to be allowed so that they get necessary freedom and space to perform and excel. The IRDA, along with the advisory committee constituted recently, is eminently qualified to undertake these tasks. In addition, a proposal has also been mooted to constitute a federation of insurance companies analogous to the Indian Banks Association. Such an institution will provide guiding principles, lay down a code of insurance ethics and generally act as a facilitator for both the life and non-life industry. As for the existing player, the public sector giant, the Life Insurance Corporation of India, the challenge is one of sustaining the huge growths it has shown in the recent times. It has to face competition for the first time in its history, particularly in the urban centers. It has to manage its huge operations more efficiently than at any other time in the past. It has to think of equipping its personnel (staff and agents) to face competitors and it may have to think of diversifying its activities to achieve economies in some areas.

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As far as the prospective entrants are concerned, the greatest challenge is to establish their presence in the minds of the public. Insurance, particularly life insurance, it is said, is never bought but sold. To convince a large population, which is comparatively not well informed about the intangible benefits of life insurance is indeed an onerous task. On top of that, to establish the brand equity of a new name in a new field is quite a challenge. The second most important challenge facing a new entrant is that of setting up infrastructure and to reach out to as many areas as possible, since life insurance is based on probability and the wider the spread, the greater are the chances of success in maintaining the expense ratios at a reasonable level. Modern life perhaps offers challenges that will be common to all the above. Improvements in health and longevity, the recent breakthroughs in the mapping of the human genome and the frequent changes in the economy may have far-reaching effects on life and health insurance. Devising products that match the changing needs of the people and managing the funds in a volatile scenario are two problems that will have to be tackled by every player in the days to come.

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1.4

COMPETITION INFORMATION

In INDIA there are a total of 14 Life Insurance Companies operating in India including the mammoth LIC. Listed below is the list of operators 1. Life Insurance Company (LIC) 2. Birla Sun-Life Insurance Company Limited 3. Allianz Bajaj Life Insurance Company Limited 4. HDFC Standard Life Insurance Company Limited 5. ICICI Prudential Life Insurance Company Limited 6. ING Vysya Life Insurance Company Limited 7. Max New York Life Insurance Company Limited 8. MetLife Insurance Company Limited 9. OM Kotak Mahindra Life Insurance Company Limited 10. SBI Life Insurance Company Limited 11. TATA AIG Life Insurance Company Limited 12. Reliance Life Insurance Company Limited 13. SAHARA Life Insurance Company Limited Life Insurance Company (LIC) LIC had a variety of insurance plans to cater to various categories of people and their diverse needs. The company offered life insurance and group insurance. It also provided social security schemes and pension schemes. Each of its business products offered a variety of different plans to suit different customers and situations. Investment in LIC was considered by a majority of its customers to be reliable and secure. Housing loans were granted through its subsidiary and LIC sold its market savings and investment

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products through its mutual fund subsidiary, LIC Mutual Fund Ltd. To serve its 140 million policyholders (2001 end), the insurance giant had 1.25 lakh employees and 6.51 lakh agents across the country. Birla Sun Life Insurance Birla Sun Life Insurance Company Limited is a joint venture between Aditya Birla Group and Sun Life Financial of Canada. Aditya Birla Group is an Indian multinational conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. Sun Life Assurance, Sun Life Financial's primary insurance business, is one of the leading insurance companies of the world and ranks amongst the largest international financial services organizations in the world. The Group has presence in several countries such as Canada, United States, Philippines, Japan, Indonesia, India and Bermuda. Bajaj Allianz General Insurance Company Limited Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany. In its first year of operations, the company has acquired the No. 1 status among the private non-life insurers. As on 31st March 2003, Bajaj Allianz General Insurance maintained its leadership position by garnering a premium income of Rs.300 Crores. Bajaj Allianz also became one of the few companies to make a profit in its first full year of operations. Bajaj Allianz made a profit after tax of Rs.9.6 crores.

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HDFC Standard Life Insurance HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and one of the subsidiaries of Standard Life plc, leading providers of financial services in the United Kingdom. Both the promoters are well known for their ethical dealings and financial strength and are thus committed to being a long-term player in the life insurance industry all important factors to consider when choosing your insurer ING Vysya Life Insurance ING Vysya Life Insurance Company Limited is a joint venture between Vysya Bank and ING Group of Holland, the world's 4th largest financial services group, with presence across 50 countries, and a heritage of over 150 years. ING Vysya Life Insurance Company Private Limited entered the private life insurance industry in India in September 2001. With in a short span of time ING Vysya Life Insurance has registered an impressive growth. The company currently has over 10,000 active advisors working from 75 branches (in 30 cities) across the country and over 2300 employees. ING Vysya Life has launched "conquering life critical illness plan", a total protection plan combining a term life cover and a unique critical illness benefit. It plan covers the basic need for protection and also provides for cover against 10 major critical illnesses. Max New York Life Insurance Max New York Life Insurance Company Limited is a joint venture between Max India Limited, a multi-business corporate, and New York Life International, a global expert in life insurance.

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New York Life is a Fortune 100 company that has over 160 years of experience in the life insurance business. Max India Limited is a multi-business corporate dealing in Clinical Research, IT and Telecom Services, and Specialty Plastic Products businesses. Max New York Life Insurance started its operations in India in 2000. It is the first life insurance company in India to be awarded the IS0 9001:2000 certifications. Max New York offers customized products tailored to suit individual's needs. With its various Products and Riders, there are more than 400 product combinations to choose from. Today, Max New York Life Insurance has a network of 57 offices spread over 37 cities all over India. MetLife India Insurance MetLife India Insurance Co. Pvt Ltd is a joint venture between MetLife Group and its Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu. Met Life Group has presence in America and Asia and has an experience of over 137 years in providing financial services. The MetLife companies are the number one life insurer in the U.S. with approximately US $2.8 trillion of life insurance in force. MetLife serves 88 of the top one hundred FORTUNE 500 companies. MetLife entered Indian insurance sector in 2001. Kotak Mahindra Old Mutual Life Insurance Limited Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's leading financial institutions and offers a range of financial services such as commercial banking, stock broking, mutual funds, life insurance, and investment banking. Old Mutual was established more than 150 years ago and offers a diverse range of financial services in South Africa, the United States and the United Kingdom. The company is listed on the London Stock Exchange with a market capitalization and has its headquarters in London.

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OM Kotak Mahindra Life has launched an investment-cum-protection plan - the Kotak Safe Investment Plan -- that offers safety of capital while permitting the policyholder to benefit from investment opportunities in the equity, debt and money markets. This unitlinked insurance plan is unique in that the various funds give the policyholder access to growth markets while the plan guarantees the sum assured on maturity or death regardless of the performance of the funds. SBI Life Insurance: With SBI Life, we can take care of such happy and unhappy surprises of life; it makes this a bit easier, so that there is no worry about your children's education, or your family's future. Whether you are looking for a safe investment vehicle with good returns or life cover with regular returns in the future, all it needs is one small action on your part. As the tag line says for SBI With SBI Life, you're sure. Tata AIG Life Insurance Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as the worlds leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG Life provides insurance solutions to individuals and corporates. Reliance Life Insurance Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 per cent shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio.

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AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices across the country, 9,000 agents, and more than 900 employees. Sahara India Life Insurance Company Ltd. First Wholly Indian Life Insurance Company in the Private Sector With Life Insurance Penetration in India at just about 22% of the Insurable population and premium income of 2% of GDP, the group sees it as a very high growth sector of Indian economy. Sahara India Life Insurance Company Ltd. (SILICL) is today the first wholly Indian-owned Life Insurance Company in the private sector. We launched our operations on 30 October 2004 after being granted license to operate as a life insurer in India by Insurance Regulatory and Development Authority on 6 February 2004 .

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1.5

SWOT ANALYSIS

STRENGTHS
1. Aviva Life offers a wide range of insurance policies covering all types of income groups. 2. The organization offers maximum number of riders / Add On benefits along with the insurance policies 3. Aviva offers triple cover in case of accidental death in mass surface public transport. 4. Only Aviva Life offers major surgical benefit rider. 5. Under savings plan or money back, Aviva Life is the only company to offer 120 % as surgical benefit. 6. In case of money back or savings plan, liquidity is maximized at Aviva Life at an interval of 3 years for 15 years term. 7. Aviva offers accidental death, disability benefit and waiver of premium into one rider. 8. Most competitive premium rates of base plan and riders are that of Aviva Life. 9. Under Term Assurance, Aviva Life has no maximum limit on Sum Assured which is not offered by any other existing insurer. 10. Under single premium policies, in case of death, Aviva Life offers a death benefit of 25 % addition to the face amount.

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WEAKNESS
1. Aviva Life does not offer a critical illness rider, i.e. the policy continues even after claim to the full face amount. This rider is only offered by HDFC Standard Life Insurance Company. 2. Only Max New York Life offers COMA, Multiple Sclerosis in critical illness rider. 3. LIC charges Re. 1 per thousand for accidental death, disability benefit and waiver of premium rider, but Aviva Life charges Rs. 1.35 per thousand for the same. 4. Aviva Life does not offer competitive group insurance policies. 5. Aviva does not offer minimum S.A. of Rs. 50,000 as offered by LIC in case of Term Assurance.

OPPORTUNITIES
1. Change in business cycles contributes as an opportunity for the company because it offers various policies suitable in different economic scenarios. 2. Large size of untapped population is also an opportunity for Aviva Life. 3. Change in life style and perception in favor of Life insurance is another opportunity for Aviva Life. 4. Increased awareness among people regarding benefits of life insurance also contributes to the opportunities of the company. 5. Continuous improvement in technology is an opportunity for the organization. 6. Lower inflation rate is also an opportunity for Aviva Life.

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THREATS
1. Reducing interest rates for government securities also poses a threat to the organization. 2. Competition posed by the existing life insurers and new entrants is also a threat to the company. 3. A fast technological obsolescence is another threat posed by the organization.

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CHAPTER 2 RESEARCH AND METHODOLOGY

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2.1

SIGNIFICANCE (i) Significance of the Industry The other reasons for opening up the insurance sector to the private insurers are as under:
To provide better Insurance coverage to Indian citizens. To augment the flow of long-term financial resources to finance the growth of Infrastructure. The Public Sector Insurance Companies had not succeeded in extending the insurance cover to all the needy people of the country due to various reasons. Hence this onerous responsibility now has been entrusted to the private insurers. 1. Penetration of Insurance: LIC and GIC could not ensure very fast growth of insurance in India even in a long period extending over four decades. Hence the penetration of insurance is very low in India. (ii) Significance for the Researcher

The primary study will be targeted towards the marketers. The study will also include semi-structured interview with marketing managers of various Insurance companies who are successfully selling Life Insurance Policies to Indian Consumers.

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2.2

MANAGERIAL USEFULNESS OF THE STUDY

2.3

RESEARCH OBJECTIVE
1. To know the consumer feedback. 2. To know the marketing strategies adopted to promote these products. To make the private players responsible to the investors and not to the government. To increase the competition in this sector so that the common people has the advantage of enjoying quality services at a reasonable cost 3. Insurance has a far reaching effect in synchronizing between the various service sectors. So if this sector can grow, the prospects of the various other service sector remains to be promising. 4. No study is generally full proof this report suffers from certain limitation with respect to information and analysis

2.4

SCOPE OF THE STUDY

The research process consists of series of closely related activities. At times, the first step determines the nature to the last step to be undertaken why a research study has been undertaken, how the research problem has been defined, in what way and why the hypothesis has been formulated, what data has been collected and what particular methods has been adopted and a host of similar other questions are usually answered when we talk of research methodology concerning a research problems or study The reason for the above are related to: 1) It was difficult to get appointment from the person whom I know because of their busy schedule.

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2) Since the project had to be submitted within seven weeks and within this time period its very difficult to convert. Since the study involved a through analysis of the insurance market and relative study of various players offering the similar products and that of similar, it was required a dedicated labor in term of both time and effort. Since the curriculum did not permit more time, the study had to be very limited.

2.5

RESEARCH AND METHODOLOGY

RESEARCH DESIGN:
Research Design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. The design used for carrying out this research is Descriptive.

DATA SOURCE:
In this research the source of data collection is: Primary data Secondary data

The sources of collection of secondary data are:

Questionnaire Books Websites Magazine Brochure

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. Research Design (i) Probability / Non- probability The sampling design for this study was non- probability sampling. Under this design, the method of sampling used was quota sampling. In quota sampling, interviewers are simply given quotas to be filled from different stratas, with some restrictions on how they are to be filled.
(ii) Exploratory/ descriptive/ experimental Research etc. The adopted research methodology is based upon the collected primary data through which the most recent and accurate piece of first hand information could be collected. Secondary data is used to support primary data wherever needed.

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Sampling Methodology (i) Sampling unit

Sample design: It refers to the technique or the procedure adopted in selecting the item from the sample I have used both random.

(ii) Sampling Technique

It is very difficult to collect information from every member of a population .As time and costs are the major limitation that the researcher faces.

(iii) Sampling Area

Area of sampling: Survey was conducted in the different location of Delhi

(iv) Sampling Size

The size of the sample was around 100 people considering the time constraint. METHODOLOGY Research Design: Research Design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. DATA SOURCE: In this research the source of data collection is: Primary data Secondary data Primary Data: which was collected through the means of the Questionnaires and one-to-one Interaction of the researcher and respondent.

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Sources: 1. Data collection method: Questionnaire 2. Location: North Delhi 3. Research duration: 2 months 4. Sample Size: 100 people 5. The Respondents: The Associate Sales Manager, Sales Managers, Associate Partner and Branch Head of Aviva Life Insurance Secondary Data: secondary data is a kind of data which have already being collected for purpose other than the problem at hand. Sources: Websites Magazine Brochure Books on Insurance marketing Yellow pages

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CHAPTER 3 CONCEPTUAL DISCUSSION

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CONCEPTUAL DISCUSSION
SELLING STRATEGIES OF AVIVA LIFE INSURANCE
Aviva Life Insurance mission, vision and values were all directed towards becoming the most admired and preferred Life insurance Company in India. They also aimed to be the first choice for employees as well as agents. In 2000, Aviva realized that to compete against LIC, the only large player in the life insurance segment, it had to build a huge network and implement a product differentiation strategy to gain customers. There was also an opportunity in the Indian markets as penetration rates were only 1.3% and insurance policies were mainly considered as a tax-saving investment, rather than risk coverage. The leading player (LIC) concentrated only on selling and very little qualitative advice was offered to the customer buying its insurance policies. This service gap enabled a customer-oriented player like Aviva to impress the potential customers. Aviva laid stress on training of agents, as personal relationships were the key to success in selling insurance. For this purpose, it took special measures to train agent advisors who were the primary source of distribution. In 2002, it had around 1900 agent advisors who underwent 152 hours of training before selling as against 100 hours stipulated by IRDA. These training programs were spread over 2 years for 500 hours and ensured up gradation of skills and knowledge. The training program covered consumer psychology, the financial markets, and development of selling skills, discipline and the right attitude in the agents. These agents were groomed to become financial advisors to customers. Aviva will also be focusing on internal brand-building, since brand-building has a larger context in the service sector. Internal employees are all opinion shapers and indirect brand-builders and brand promise needs to be replicated down the chain at every customer touch point.

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To strengthen its distribution system further, in 2003, Aviva adopted alternative distribution channels viz. franchisee model, rural business, telemarketing, banc assurance and corporate alliances. It appointed gram sahayaks in some rural locales who were trained to identify and sell specialized insurance products. There are tapping opinion leaders in the village like schoolteachers, social workers and chemists, and creating products which suit rural needs," commented Sarkar. The company tied up with Shoppers' Stop and reached out to customers who held the chain's "First Citizen" discount card and bought children's clothes more than once a month. Such customers were tapped for child saving schemes as well. Aviva created product differentiation by giving Whole Life policies" that offered customers the correct balance between protection and savings. They offered for the first time in India a free-look period i.e., a customer had 15 days period to weigh the various options offered by Aviva which helped him to take an informed decision. This standard was adopted by IRDA as the best practice to be emulated by all players in the Indian insurance market. They were also the first company to sell a policy with riders. For example, 5-Year Term Renewable and Convertible Policy had two riders attached to it viz. Personal accident benefit and Dread disease benefit, which could be attached at the time of purchase of policy or later, subject to certain conditions. Aviva also offered a specialized rural policy provided term insurance for Rs10,000 for a sum of Rs100, which was affordable to that particular segment of society. Aviva offered cash bonus in May 2003 to its Whole Life policyholders, who joined before February 6, 2002. As a value added service, this bonus could be used in five different ways: accumulated with the company and earn interest, buy paid up additions to raise the death benefit of the base policy, offset against future payable premiums, taken in cash or buy an additional term cover for one year. In 2003, Aviva realized that it needed a new workflow system, as the existing one was unable to meet the customer requirements efficiently. Therefore, it tied up with nugent to supply business process management tools. These technological improvements helped to 59

reduce the turnaround time for customer request by 45%, aided in immediate retrieval of information, and generated savings on paperwork and telephone costs. Aviva also fixed benchmarks on claim processing time, processing of complaints and customer satisfaction and monitored these regularly. All these measures served to enhance customer service levels in the company. At the outset, the mission and vision of Aviva clearly defined its objective to be the most admired and preferred insurance company in India. It then went about doing a SWOT analysis that formed the basis for its marketing strategy. It had the advantage of variety of products from New York Life, a leading insurance player in the US, which had to be introduced with Indian perspective. The largest threat was LIC, which had a big distribution network. Aviva Prudential also saw an opportunity in the under-penetrated insurance market where insurance policies are considered as an investment or tax-saving tool. Using this market analysis it went about building its distribution network through direct sales personnel called agent advisors. Special attention was given to training them so that they could go beyond selling and offer professional advice to customers. Aviva leveraged the fact that insurance policies were mainly treated as tax savers or investment tools. Therefore, it emphasized on protection against risk in its products and combined savings with protection creating a differentiated product. These measures coupled with other product differentiations and customized processes helped it to gain a presence in the insurance market. Aviva mainly used the concept of protection against risk to promote its products. It felt that existing insurance products, although having a money-back offer, did not offer protection to the customer.

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The Whole Life policies of Aviva, therefore concentrated on a unique combination of protection and saving that appealed to the customer. Along with this, riders in the form of supplementary policies served as an additional benefit to the customer. Another first for Aviva was its cash bonus offer which offered cash back on certain policies. As a value addition, there were various options wherein this cash could be invested with the company. Continuing with its innovations, Aviva also offered a freelook for 15 days, which later became the norm for insurance industry. With a focused approach to the rural areas, Aviva introduced a rural policy with minimum investment to suit the pockets of the lower income groups residing in villages. To make this section of customers understand the benefits of their policies, they adopted a unique strategy of appointing schoolteachers and social workers as agents, who being opinion leaders helped convince the villagers about the product. Other distribution channels like banks and corporate alliances were a means to expand the customer base of Aviva via customers visiting these places. The direct selling agents established personal rapport with customers on one-to-one basis, thereby increasing goodwill and loyalty towards Aviva. To support their products and distribution, they built a customized business process system using the web platform to generate quick customer response. This model also helped them to track complaints and measure customer satisfaction. The improved productivity and low costs helped to improve Aviva's profits and gave them increased business.

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VARIOUS SELLING STRATEGIES ADOPTED BY AVIVA LIFE ARE DISCUSSED BELOW: 1. BONUS STRATEGY
Bonus is a function of surplus funds available after adjusting for future liabilities and current assets. This is based on actuarial experience. Therefore, based on actuarial experience, bonuses will be announced not before three years of operations. Aviva offers innovative and immediate (not reversionary) bonus options, which add value to customers. Bonuses can be received in cash, employed to offset premium, left on deposit with interest, used to buy additional insurance by way of paid-up additions or term insurance.

2. RURAL STRATEGY
Aviva recognizes the rural market and social sectors as being distinct, requiring different selling and product strategies. Therefore, Aviva have designed specific products and appointed village cooperatives in various districts across India. These village cooperatives help increase awareness of life insurance.

3. COMMUNICATION STRATEGY
Aviva objective is to build Indias most admired Life Insurance Company. Aviva seeks to build trust with customers. Aviva focus on life insurance and experience of over 158 years has helped position us as life insurance specialists. The selling strategy is to provide a consistent brand experience across all stakeholders customers, shareholders, employees, agents, regulator and the public. 62

The brand experience will be based on positioning of being a trusted life insurance specialist that can partner the customer for life. Aviva is also sparing no efforts to increase awareness for the true value of life insurance, which lies in risk protection.

TRONG AGENCY FORCE AND DIFFERENT AGENCY COMMISION STRUCTURE

Aviva has over 3,000 agents / advisors. Aviva Prudential believe in a quality approach to business and therefore select and train only the best in class people so that they can deliver value to the customer. The company places a lot of emphasis on its selection process, which comprises four stages screening, psychometric test, career seminar and final interview. The agents are given in-house training to ensure optimal control on quality. Commission is purely a function of the business that they generate. Given approach to business it will not be unusual to see some agents earn more remuneration than the managing director of the company.

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CHAPTER 4 DATA ANALYSIS

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1. Age of the respondents

PARTICTULARS Less than 25 25 - 35 35 - 45 Above 45 TOTAL

NO.OF.RESPONDENT 11 40 20 29 100 Age of the Respondents

NO.OF.RESPONDENT

PERCENTAGE 11% 40% 20% 29% 100

PERCENTAGE

100 80 60 40 20 0 Less 25 - 35 35 - 45 than 25 Above 45 TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) 11% of the respondents are less than 25 years old. 40% of the respondents are between 25 and 35 years of age. 20% of the respondents are between 35 and 45 years of age. 29% of the respondents are more than 45 years of age.

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2. Qualification of the respondents. PARTICUALR Graduate Post Graduate Diploma Other discipline TOTAL NO.OF.RESPONDENT 52 29 8 11 100 PERCENTAGE 52% 29% 8% 11% 100%

Qualification of the Respondents

Graduate Other discipline 100 80 60 40 20 0 NO.OF.RESPONDENT PERCENTAGE Post Graduate TOTAL Diploma

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) 52% of the respondents were graduate 29% of the respondents were post graduate 8% of the respondents were diploma 10% of the respondents were other discipline

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3) Occupation of the respondents PARTICULARS Business man Professionals Job holders Others TOTAL NO.OF.RESPONDENT 34 18 37 11 100 PERCENTAGE 34% 18% 37% 11% 100%

Occupation of the Respondents

Business man Others 100 80 60 40 20 0 NO.OF.RESPONDENT Professionals TOTAL Job holders

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) 34% of the respondents are businessmen. 18% of the respondents are professionals. 37% of the respondents are job holders. 11% of the respondents are background.

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4)

Average annual income of respondents. NO.OF.RESPONDENT 33 43 20 4 100 PERCENTAGE 33% 43% 20% 4% 100%

PARTICULARS Up to 1 lakh 1 lakh - 3 lakh 3 lakh - 5 lakh 5 lakh & above TOTAL

Average annual income of respondents.

100 80 Up to 1 lakh 1 lakh - 3 lakh 3 lakh - 5 lakh 5 lakh & above TOTAL 60 40 20 0 NO.OF.RESPONDENT

ANALYSIS: From the survey it was found that amongst 100 respondents a) 33% of the respondents have an average annual income up to 1 lakh b) 43% of the respondents have an average annual income from 1 lakh to 3 lakh c) 20% of the respondents have an average annual income from 3 lakh to 5 lakh d) 4% of the respondents have an average annual income above 5 lakh

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5) Family size of respondents PARTICULARS Below 5 members 5 - 10 members Above 10 members TOTAL NO.OF.RESPONDENT 50 32 28 100 PERCENTAGE 50% 32% 28% 100%

FAMILY SIZE

28% 50% below 5 members 5- 10 member above 10 member 32%

ANANLYSIS: From the survey it was found that amongst 100 respondents a) 50% of the respondents are below 5 members. b) 32% of the respondents are between 5 to 10 members. c) 28% of the respondents are above 10 members.

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6) According to life insurance is. PARTICULARS Risk Coverage Tax Savings Good return Security All the above TOTAL NO.OF.RESPONDENT 10 3 4 3 80 100 PERCENTAGE 10% 3% 4% 3% 80%

Life Insurance is
Risk Coverage Security 100 80 60 40 20 0 NO.OF.RESPONDENT Tax Savings All the above Good return TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) e) 10% of the respondents say risk coverage. 3% of the respondents say tax savings. 4% of the respondents say good returns. 3% of the respondents say financial security. 80% of the respondents say all of the above.

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7)

Awareness of Aviva life insurance NO.OF.RESPONDENT PERCENTAGE 17 83 100 17% 83% 100%

PARTICULARS Yes No TOTAL

Awareness of ICICI Pru

Yes 100 80 60 40 20 0 NO.OF.RESPONDENT No TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) 83% of the respondents say that they are aware of ICICI Prudential life insurance co. b) 17% of the say that they are unaware of ICICI Prudential life insurance co

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8) Awareness regarding insurance. PARTICULARS Yes No TOTAL NO.OF.RESPONDENT 2 98 100 PERCENTAGE 2% 98% 100%

INSURANCE AWARENESS
100 90 80 70 60 50 40 30 20 10 0

NO.OF.RESPONDENT PERCENTAGE

Yes

No

TOTAL

ANALYSIS: From the survey it was found that amongst 100 respondents a) 98% of the respondents say that they are aware of insurance. b) Only 2% are unaware of insurance.

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9) % of respondents who are under different plans of Aviva Prudential life insurance co. PARTICULARS Invest gain plan Unit gain plan Child gain plan Whole life plan Pension plan TOTAL NO.OF.RESPONDENT 41 36 8 15 No 100 PERCENTAGE 41% 36% 8% 15% No 100%

INSURANCE PLANS OF ICICI PRUDENTIAL

15% 8% 41%

36%

Invest gain plan Unit gain plan Child gain plan Whole life plan Pension plan

ANALYSIS: From the survey it was found that amongst 100 respondents a) b) c) d) e) 41% of the respondents are under invest gain plan 36% of the respondents are under unit gain plan 8% of the respondents are child gain plan 15% of the respondents are whole life plan No body under pension plan

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10)

% of respondents benefits of choosing the particular products NO.OF.RESPONDENT 60 20 12 8 100 PERCENTAGE 60% 20% 12% 8% 100%

PARTICULARS Risk coverage Additional benefit Maturity date Sum Assured TOTAL

Benefits of Particular Products

100 90 80 70 60 50 40 30 20 10 0

Risk coverage Additional benefit Maturity date Sum Assured TOTAL

ANALYSIS: a) 36% of the respondents say that a benefit of choosing the particular Product is for Safety of life. b) 20% of the respondents say that a benefit of choosing the particular products is for additional benefit to family c) 12% of the respondents say that a benefit of choosing the particular products is for maturity date d) 8% of the respondents say that a benefit of choosing the particular products is for sum assured

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11)

% of disadvantages in insurance plan NO.OF.RESPONDENT 35 20 19 14 12 100 PERCENTAGE 35% 20% 19% 14% 12% 100%

PARTICUALRS Liquidity Lapsation Unable to decide premium High risk coverage Fixed Term TOTAL

Disadvantages in Insurance Plans

100 80 60 40 20 0 NO.OF.RESPONDENT Lapsation High risk coverage TOTAL

Liquidity Unable to decide premium Fixed Term

ANALYSIS: From the survey it was found that amongst 100 respondents a) 35% of the respondents say that disadvantages in insurance plan are liquidity. b) 20% of the respondents say that disadvantages in insurance plan are lapsation. c) 19% of the respondents say that disadvantages in insurance plan is unable decide premium. d) 14% of the respondents say that disadvantages in insurance plan are high risk coverage at high premium. e) 12% of the respondents say that disadvantages in insurance plan is fixed term

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12)

% of respondents who want to invest in these different avenues. NO.OF.RESPONDENT 40 25 10 11 5 9 100 PERCENTAGE 40% 25% 10% 11% 5% 9% 100%

PARTICUALRS Recurring Deposit Equity Fund Balanced Fund Mutual Fund Debt Fund Cash Fund TOTAL

INVESTMENT AVENUES
9% 40% R.D Equity Balanced fund Mutual Fund 10% 25% Debt Fund Cash Fund

5% 11%

ANALYSIS: From the survey it was found amongst 100 respondents a) b) c) d) e) f) 40% of respondents say that they want to invest in R.D 25% of respondents say that they want to invest in equity 10% of respondents say that they want to invest in balanced fund 11% of respondents say that they want to invest in mutual fund 5% of respondents say that they want to invest in debt market 9% of respondents say that they want to invest in cash

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CHAPTER 5 FINDINGS AND RECOMMENDATIONS

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FINDINGS
On an analysis and evaluation of the data collected from the respondents the following findings were found. Before establishment of private concerns the share of LIC was 22% hence there is a wide scope for private concerns to enter in to market. Total 100 respondents have been approached out of which 75 are the potential respondents who have shown interest for investment and finance plan Above 20% of respondents are shown interest for investment and financial plan About 33.33% of respondents are not interest to give their personal records. About 12.67% of respondents have already been covered by other insurance companies. About 10% of respondents have given invalid records. About 10% of respondents are newly employed or trainees. About 10% of respondents interested for investment plan after knowing AVIVA LIFE INSURANCE products.

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RECOMMENDATIONS TO COMPANY:
Since Aviva Life Insurance co. ltd is the largest in terms of FDI invested, in terms of work force, in terms of market share, in terms of no. of customers. All these positive stands of the company place at the number one position. On second aspect whatever amount of money Aviva save, can be used to increase the no. of policies, which will helpful to increase the market share of the company. Since the customers think about the companies in the industry, when they invest money in the life insurance industry. So its necessary to increase the market share of the company. There are some recommendations.

Open some more branches in semi urban and rural area. Aviva Prudential has almost its branches in urban area or metros. So in order to increase the no. of customer, Aviva should increase the approach towards potential customers. For that it has to increase the branches in the semi urban cities like C, D grade cities. And the rural marketing is the best option for Aviva to increase its base in the market

Improve customer services. In order to take the advantage of being industry leader in private sector, Aviva has to improve its customer services. According to my experience in the company, a good number of customers forget to pay their premium at time so it causes a big loss to the company. Aviva has already collaborated with the Aviva for its Bancassurance facility and then can include another feature in it.

Bring some unit linked life insurance plans in the market. Being a market leader doesnt ensure the leadership in the future. Since after increment in FDI from 26% to 49% all player will have the opportunity to capture the market share. So in order to maintain its position Aviva should Introduce

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some new market linked insurance plan, which will give a competitive advantage to the Aviva against its competitors. Trained the financial advisors more efficiently. In the changed scenario, more efficient training will be needed, so Aviva should provide good and efficient training to their financial advisors. Because they are the one who interact directly with the customers. So good training will give them the right way to deal with the potential customers.

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CONCLUSION

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ANNEXURE

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QUESTIONNAIRE

1. 2. 3.

Name Address Age a. Less than 25 b. 25 35

_________________________________ _________________________________ _________________________________ _________________________________ c. 35-45 d. 45 and above

4.

Qualification a. Graduate b. Postgraduate c. Diploma d. Other discipline

5.

Occupation a. Business b. Professional c. Job holder d. Other

6. a. b. c. d. 7.

What is your average annual income? Up to 1 lakh 1 lakh to 3 lakhs 3 lakhs to 5 lakhs 5 lakhs and more

Your family size a. Below 5 members b. 5 10 members c. Above 10 members a. b. c. d. e. According to you life insurance is, A tax saving plan A saving scheme with good return A financial security for the family Risk coverage All the above

8.

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9.

Have you taken any life insurance product of Aviva Life insurance? YES NO

10. a. b. c. d. e. f. 11.

If yes Which are in these? Unit gain plan Invest gain plan Whole life plan Children plan Pension plan Others __________________ Are you aware of the benefits in your policy? Yes No

If yes what are they? Sum assured Additional benefits Maturity date Risk coverage 12. According to you what are the disadvantages in an insurance plan? Lapsation Liquidity Fixed term Unable to decide your premium Unable to decide the sum assured High risk coverage at high premiums Other disadvantages In which of the following would you like to invest? Equity fund Debt fund Balanced fund Cash fund Mutual fund Recurring deposits Any suggestion for Aviva Life Insurance ______________________________________________________ ______________________________________________________ Thank you for sparing your valuable time

13.

14.

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BIBLIOGRAPHY

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BIBLIOGRAPHY

INTERNET WEBSITE www.kampusonline.com www.google.com www.wikipedia.org/wiki/Insurance www.avivaindia.com www.marketresearch.com www.policybazaar.com www.economictimes.indiatimes.com

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