A Project Report on Bharti-AXA Life Insurance Co.

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ACKNOWLEDGEMENT

If words are considered to be signs of gratitude then let these words convey the very same, my sincere gratitude to Bharti AXA Life Insurance for providing me an opportunity to work with Bharti AXA and giving necessary directions on doing this project to the best of my abilities. I am highly indebted to Mr. Malaya Mohapatra (ADM) and company project guide Mr. Satyanath Satpathy (MOA) who has provided me the necessary information and also for the support extended in the completion of this report and there valuable suggestion and comments on bringing out this report in the best way possible. I also thank Mr. Sharada Prasad Sahoo, who has supported me with the valuable insights into the completion of this project. I would like to extend my sincere thanks to all executives of Bharti-AXA for their kind help and cooperation during the entire course of the project.

Sushobhan Birtia Date : Place :

DECLARATION I hereby declare that this work entitled “ANALYSIS OF BHARTI-AXA RANGE OF SERVICES” --A project on Bharti-AXA submitted by me to Interscience Degree College under UTKAL University, Bhubaneswar for the degree of bachelor in business administration is my work carried out under the guidance of mentor Mr.Sharada Prasad Sahoo, and company guide Mr. Malaya Mohapatra (ADM) and Mr. Satyanath Satpathy (MOA). This report neither full nor in part has ever been submitted for award of any other degree of either this Institution or any other University.

Sushobhan Birtia

CERTIFICATE:

OFFER LETTER:

TABLE OF CONTENTS: __

Pages

1. INRTODUCTION:-………………………………………………………………………………………….…… 1-19 1.1. Company Profile………………………………………………………….………………………………. 3 1.2. Corporate Profile……………………………………………………………………………………….…. 5 1.3. Objective of the Study…………………………………………………………………………………… 19 2. LITERATURE REVIEW:-…………………………………………………………………………..…………. 20-29 2.1. Indian Insurance Industry History………………………………….…………………………… 20 2.2. Indian Insurance Sector Reform…………………………………………………………………… 21 2.3. Key Milestone……………………………………………………………………………………………… 22 2.4. IRDA…………………………………………………………………………………………………………… 24 3. RESEARCH METHODOLOGY:-…………………………………………………………………………… 30-34 3.1. Marketing Research Process……………………………………………………………………… 30 3.2. Data Collection…………………………………………………………………………………………… 32 3.3. Limitations of the Study……………………………………………………………………………. 34 4. DATA ANALYSIS:-………………………………………………………………………………………...…

35-53

5. FINDINGS:-………………………………………………………………………………………….……………

54

6. CONCLUSION:-……………………………………………………………………………………………….…

55

a) References…………………………………………………………………………………………….…… 56 b) ANNEXURE- Questionnaire………………………………………………………………………… 57-58

EXECUTIVE SUMMARY:

This project was carried out in the MARKETING/HR department of BHARTI AXA Life insurance co. Bhubaneswar. Bharti AXA Life insurance is only concern with life insurance and General insurance. The objective of this project is to study the entire ANALYSIS OF BHARTI-AXA RANGE OF SERVICES processes at Bharti AXA Life insurance. The Marketing cum HR Department of Bharti AXA Life insurance carries out both these functions quite effectively. Hence, the range of services is studied thoroughly and some inferences accordingly. The data and information collected is with respect to working procedure specifically regarding research analysis, the data referred for this study is for the year 2007 - 11. I have applied the concept and gained knowledge learned during the course in at CMRD In practical business situation and understood these concepts in better way. The research work really has poured of immense learning for me. I would like to thank whole heartedly to Bharti AXA and CMRD, for giving me this exposure.

1: INTRODUCTION: Why Insurance sector? The service industry is one of the fastest growing sectors in India today. The upcoming sectors which are really showing the graph towards upwards are - Telecom, Banking, and Insurance. These sectors really have a lot of responsibility towards the economy. Amongst the above-mentioned areas insurance is one sector, which took a lot of time in positioning itself. The insurance business of non-life companies was not much in problems but the major problem was with life insurance. Life Insurance Corporation of India had monopoly for more than 45 years, but the picture then was completely different. Previously people felt that “Insurance is only for classes not for masses” but now the picture is viceversa. The formation of IRDA, entrance of private life insurance companies into India with one foreign partner, compulsory training of Insurance agents etc. developments started to take place. And this was the time when these companies started searching for proper channel partners who can help the organization in expanding its network and business in India. After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only lifeinsurance company for the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. In India only 25% of the population has life insurance. So Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. Insurance is such industry where labour turnover is the maximum than that of any other industry hence there is lot of scope for HR to work in recruitment and selection process. On the whole Bharti AXA life insurance is a good place to work at. Every new recruit is provided with extensive training on unit linked funds, financial instruments and the products of Bharti AXA. This training enables an advisor/sales manager to market the policies better. The

company should try to create awareness about itself in India. In the global market it is already very popular. With an improvement in the sales techniques used, a fair bit of advertising and modifications to the existing product portfolio, Bharti AXA would be all set to capture the insurance market in India as it has around the globe.

1.1: COMPANY PROFILE:

Bharti AXA Life is a life insurance player that was started in 2006. It brings together strong financial expertise of the Paris-headquartered AXA Group, and Bharti Enterprises - one of India's leading business groups with interests in telecom, agricultural business, financial services, and retail. The joint venture has a 74% stake from Bharti and 26% stake from AXA Asia Pacific Holdings Ltd. (APH) .The Company launched national operations in December 2006.

Bharti Enterprises is one of India‟s leading business groups with interests in telecom, agri business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of India‟s leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti Airtel was ranked amongst the best performing companies in the world in the Business Week IT 100 list 2007. Bharti Teletech is the country‟s largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with ELRO Holdings India Ltd. – „Field Fresh Foods Pvt. Ltd‟ - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - „Bharti AXA Life Insurance Company Ltd.‟ - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture – „Bharti Wal-Mart Private Limited‟ – with Wal-Mart, for wholesale cash-and-carry and back-end supply chain management operations.

AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA.

We undertook an in-depth analysis wherein we identified the notion of preference was totally related to the trust granted to various names in insurance and financial services. The level of trust is very inadequate today, regardless of the brand considered. This is because the perception of consumers is that we are all evolving only in "a world of promises." And this is what we have to redefine. Beyond promises... proof We don't want to make promises any more. Instead, we want to demonstrate our ability to respond to client needs with real and tangible proof and, in so doing, to establish an authentic relationship of trust with our clients.

These are the three attitudes that clients most expect from an insurance and financial services company in exchange for their vote of confidence. These three attitudes stood out from the others in the consumer research we conducted across markets, regardless of their level of maturity. They are at the heart of our actions and our commitments to clients.

1.2: CORPORATE PROFILE: Bharti AXA Life Insurance is joint ventures between Bharti, one of India‟s leading business groups with interests in telecom, agree business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, company has over 5200 employees across over 12 states in the country. Our business philosophy is built around the promise of making people "Life Confident". As company expand our presence across the country to cater to your insurance and wealth management needs with our product and service offerings, company continue to bring 'life confidence' to customers spread across India. Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them. Company is working on the base of five core values

Professionalism



Innovation



Team Spirit



Pragmatism



Integrity

BHARTI ENTERPRISES

BHARTI TELETECH

TELETECH SERVICES

BHARTI TELECOM

BHARTI FOOD

BHARTI SEYCHELLES

BHARTI TELEVENTURE

50 Million (500 Lakhs Customers) 130,000 Employees 72 Billion Euros (Rs. 4, 16,300. Cores) Revenue 869 Billion Euros (Rs.50 24, 500.Crores) Asset under Management Key features: 

Using multi-distribution, multi product platform techniques.

BHARTI TELESOFT



Adapting AXA's best practices as a sound platform for profitable growth.



Leveraging Bharti's local knowledge, infrastructure and customer base.



Delivering high levels of shareholder return.



Building long term value with business partners by enhancing the proposition to their customers.



Retaining the best talent in India.

Our Philosophy: Available, Reliable and Attentive to our customer’s needs Vision: To be a leader and the preferred company for financial protection and wealth management in India.

Bharti AXA Life Insurance Growing Presence: Number of cities

- 111

Number of offices

- 163

Number of Agents

- 30,000 PLUS

. Promoter's Strength: Bharti Enterprises is one of India‟s leading business groups with interests in telecom; agree business, insurance and retail. Its flagship telecom brand 'Airtel', has over 60 million customers across the length and breadth of India.

AXA Group is worldwide leader in Financial Protection. AXA is among Fortune Global 15 companies having 120,000 employees and is represented in over 60 countries worldwide.

Largest Insurer: AXA Group has 120,000 employees and is represented in over 60 countries worldwide

Service Excellence: Company stand by three main commitments to our customers and agents, effective local service, professional expertise, and professional code of ethics. Company aim to build close and lasting relationships by offering expert advice, providing a supportive environment and a full range of adapted solutions.

Information Technology Driven: Our commitment and continuous investment in Information Technology enables the Company to provide unparalleled customer service.

Bharti AXA Club Member: Become a Bharti AXA Club Member and enjoy additional benefits. Bharti AXA's Support for Our Agents: Company is looking for bright, self-motivated people who want to build a successful career in insurance sales and consultancy. We offer good financial rewards and recognition, comprehensive training, excellent back-up and the full support of a world-class organization.

Bharti-AXA fund returns are above the median returns of the Industry*: BhartiAXA Grow Money BhartiAXA Pension Grow Money

3Mth

RANK

1Yr.

RANK

2Yr.

RANK

8.92%

3

57.48%

6

3.31%

4

8.96%

2

57.62%

5

3.46%

3

The equity fund performance for all periods for the above funds is within the top six in the industry.

*Published data- Inconversation Newsletter

Bharti-AXA offers a range of innovative products to cater to the insurance and wealth management needs of our customers.

INDIVIDUAL PLANS:  PROTECTION:  Bharti-AXA Life ELITE Secure  Bharti-AXA Life Secure Confident  Bharti-AXA Life Family Income Secure  Bharti-AXA Life Protect Plus  Bharti-AXA Life Premium Waiver Rider  WEALTH CREATION WITH PROTECTION:  CHILD PLANS: 1. Bharti-AXA Life Bright Stars Edge 2. Bharti-AXA Life Future Champs 3. Bharti-AXA Life Power Kid Insurance Plan  GURANTEED PLANS: 1. Bharti-AXA Life Save Confident 2. Bharti-AXA Life True Wealth 3. Bharti-AXA Life Aajeevan anand 4. Bharti-AXA Life Monthly Income Plan  OTHER MARKET LINK PLANS: 1. Bharti-AXA Life Wealth One  WEALTH:  Bharti-AXA Life Triple Health Insurance Plan  Bharti-AXA Life Easy Health  RETIREMENT:  Bharti-AXA Life Wonder Years Retirement Plan

GROUP PLANS:  LIFE INSURANCE:  Bharti-AXA Life Shield  Bharti-AXA Life Sanjeevani  CREDIT PROTECTION:  Bharti-AXA Life Credit Secure  Bharti-AXA Life Mortgage Credit Shield  Bharti-AXA Life Credit shield  Bharti-AXA Life Premier Protect Home Shield  HEALTH:  Bharti-AXA Life Swasthya Sanjeevani

Investment Philosophy: Our investment philosophy is carved out from stringent and robust investment policies. Risk management is an integral part of our investment processes. The company has well-defined risk policies and process covering both portfolio and process risks. Our equity investments are currently made primarily in large cap stocks (>85%), as large cap stocks are less volatile than mid cap or small cap stocks. The debt portfolio of the company is currently invested only in highest credit quality assets i.e. Government of India securities and securities issued by AAA rated companies. A reasonable level of liquidity is maintained with the respective funds so as to enable smooth redemption processes on account of switches, claims etc.

Organization Structure: Works through many channels marketing, human resource, finance, information technology,

Marketing wing is divided into 1) DIRECT SALES FORCE – Have two tired salaried adviser force to target the large and diverse Bharti Airtel customer base.

2) AGENCY-focus on building a highly productive agency force. This wing needs high quality of training, and high quality recruitment.

3) BANK ASSURANCE- planes for developing strategic partnership with quality banks.

4) CORPORATE AGENCY AND BROKING CHANNEL- planes for developing strategic partnership.

Direct Sales Force: HOM ZSM RSM ARSM AM AAM SR.SM SM SM

SM-G

SM-D

FO

FO-G

FO-D FA

FE

       

FE-G

HOM – Head of Marketing ZSM – Zonal Sales Manager RSM – Regional Sales Manager ARSM – Associate Regional Sales Manager AAM – Associate Area Manager SM – Sales Manager FO – Financial Officer FE – Financial Executive

FE-D

Agency Structure:

Agency Head

RM mMM

ARSM

BSM

MOA

Advisor

 MOA – Agency Manager  BSM – Branch Sales Manger

Strategy: 

To achieve a top 5 market position in India through a multi-distribution, multi-product platform



To adapt AXA's best practice blueprints as a sound platform for profitable growth



To leverage Bharti's local knowledge, infrastructure and customer base



To deliver high levels of shareholder return



To build long term value with our business partners by enhancing the proposition to their customers



To be the employer of choice to attract and retain the best talent in India



To be recognized as being close and qualified by our customers

Strategic differentiators: 

Strong partner Bharti - provides access to customer base of more than 20 million



Multi channel execution capability



Current Asia product range which is a strong match to products sold to the mass and mass affluent



Global scale providing cost effective and speedy re-use of systems, products and business capability



Strong AXA and Bharti brands which can be leveraged to attract and retain a high quality management team.

SWOT ANALYSIS: Strength:  Bharti AXA Life Insurance Company India‟s Most Respected Company in the insurance industry of India.  Excellent services.  Customized of product as per customer needs.  Brand image.  Business experience.  Strong financial base.  Innovative product technology, organization culture and environment. Weakness:  Lot of the competitions is in the market offers some product difference in the premium and offerings.  Target only bigger income group where other companies are trying to catch middle lower level people.  Higher premium as compared to the other companies.  Client face problem to get insured due to large number of formalities.  High target of financial advisor and for the sales development.

Opportunity:  Huge market is literally untapped out of estimated 320 million is usable markets only 20% of the population is insured.  In the pension field where people want good life after their retirement.  Indian people are more emotional towards their children that are why children plan are selling like hot cakes.  Health insurance and pension schemes and estimated market potential of approximately $ 10 billion. Threats:  Weak perception of private players in the minds of Indian people due to frequent financial schemes.  Large number of insurance players.  Current government policies do not encourage gross domestic savings.  Of the tax liabilities of the service rises the customers will have little money to invest.  And change rules day by day more rigid which is very difficult for the company.

PROMOTERS: Bharti Enterprises: Bharti Enterprises is one of India‟s leading business groups with interests in telecom, agro business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of India‟s leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti Airtel was ranked amongst the best performing companies in the world in the Business Week IT 100 list 2007. Bharti Teletech is the country‟s largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with „Field Fresh Foods Pvt. Ltd‟ - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - „Bharti AXA Life Insurance Company Ltd.‟ - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture – „Bharti Wal-Mart Private Limited‟ – with Wal-Mart, for wholesale cash-and-carry and back-end supply chain management operations.

AXA Group: 

AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro

5,140

million.

The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA.

Bharti AXA General Insurance is a joint venture between Bharti, one of India‟s leading business groups with interests in Telecom, Agri Business and Retail; and AXA, world leader in Financial Protection and Wealth Management. Bharti Group holds 74% of equity and AXA holds 26% of the equity. The company was incorporate 13th July 2007 and plans to commence national operations in August 2008. Headquartered in Bangalore, the company currently has offices in 7 citiesBangalore, Mumbai, Delhi, Ahmadabad, and Hyderabad, Ludhiana and Chennai- and plans to grow to a total strength of 29 branches by the end of the first year of operations. With a vision to become the leader and preferred company for financial protection in India, Bharti AXA General Insurance offers its customers - individuals and businesses- a wide range of products and services that meet their insurance needs. The company will leverage the Bharti Group‟s large customer pool and develop a strong multi channel distribution network in both urban and rural markets.

With a customer commitment to provide Fast, Fair & Friendly service in all aspects of business, the company offers transparency, structured customer support and trained manpower, backed by a robust IT platform. The company‟s claims philosophy is to offer prompt and hassle free claims service that deals with the claims process with empathy. The Management team at Bharti AXA consists of experienced leaders who are passionate about their company‟s vision and goals and are committed to the development of Bharti AXA General Insurance as the preferred company for Financial Protection in India.

1.3: OBJECTIVE OF THE STUDY:

1. To know about the saving habits of consumers. 2. To know the awareness about Insurance Plans and their benefits. 3. To know the attitude of individuals towards risk bearing. 4. To know the objective of individuals while purchasing insurance. 5. To know the attitude of individuals towards insurance plans and preference to Bharti AXA Life. 6. To check out the consumer’s financial position.

2: LITERATURE REVIEW:

2.1: Indian Insurance Industry History: Life insurance came to India from England in 1818 when oriental life insurance company started in Calcutta by Europeans. After this many insurance companies had been started in India. But these companies were looking after only the needs of European community established in India. Indian people were not being insured by these companies. First Indian life insurance company came as Bombay mutual life insurance assurance. Second company was Bharat insurance company came in 1896. After this the united India in madras, national Indian and national insurance in Calcutta and the co-operative assurance in Lahore were established in 1906. To regulate Indian insurance business first insurance act came in 1912 as life insurance company act and provident fund act. These acts consist of premium rates tables and periodical valuations of companies. In the first two decade of 20th century many life insurance companies were started. So the insurance act came in 1938 to governing life and non life insurance companies and to provide strict state control. In 1956 the life insurance business in India was nationalized. In 1956 life insurance corporation of India (LIC) was created to spreading life insurance much more widely particularly in rural areas. In that year LIC had 5 zonal offices, 33 divisional offices and 212 branch offices. In 1957 the business of LIC of sum assured of 200crores, 1000crores in 1970, and 7000 cores in 1986. The history of the Indian insurance sector dates back to 1818, when the Oriental Life Insurance Company was formed in Kolkata. A new era began in the India insurance sector, with the passing of the Life Insurance Act of 1912. The Indian Insurance Companies Act was passed in 1928. This act empowered the government of India to gather necessary information about the life insurance and non-life insurance organizations operating in the Indian financial markets. The Triton Insurance Company Ltd formed in 1850 and was the first of its kind in the general insurance sector in India. Established in 1907, Indian Mercantile Insurance Limited was the first company to handle all forms of India insurance.

2.2: Indian Insurance: Sector Reform: The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance sector. The aim of the Malhotra Committee was to assess the functionality of the Indian insurance sector. This committee was also in charge of recommending the future path of insurance in India. The Malhotra Committee attempted to improve various aspects of the insurance sector, making them more appropriate and effective for the Indian market. The recommendations of the committee put stress on offering operational autonomy to the insurance service providers and also suggested forming an independent regulatory body. The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial policy changes in the insurance sector of India. It led to the formation of the Insurance Regulatory and Development Authority (IRDA) in 2000. The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to initiate different policy measures to help sustain growth in the Indian insurance sector. The Authority has notified 27 Regulations on various issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting Procedure, Protection of policy holders' interest etc. Applications were invited by the Authority with effect from 15th August, 2000 for issue of the Certificate of Registration to both life and non-life insurers. The Authority has its Head Quarter at Hyderabad. Detailed information on IRDA is available at their web-sitewww.irdaindia.org A. Protection of the interest of policy holders: IRDA has the responsibility of protecting the interest of insurance policyholders. Towards achieving this objective, the Authority has taken the following steps: 

IRDA has notified Protection of Policyholders Interest Regulations 2001 to provide for: policy proposal documents in easily understandable language; claims procedure in both life and non-life; setting up of grievance redressed machinery; speedy settlement of claims; and policyholders' servicing. The Regulation also provides for payment of interest by insurers for the delay in settlement of claim.



The insurers are required to maintain solvency margins so that they are in a position to meet their obligations towards policyholders with regard to payment of claims.



 

It is obligatory on the part of the insurance companies to disclose clearly the benefits, terms and conditions under the policy. The advertisements issued by the insurers should not mislead the insuring public. All insurers are required to set up proper grievance redress machinery in their head office and at their other offices. The Authority takes up with the insurers any complaint received from the policyholders in connection with services provided by them under the insurance contract.

B. The first Indian Insurance Company was the Bombay Assurance Society Ltd. In 1870 other companies like: 1. Hindustan Co-operative in Kolkata. 2. National Insurance in Kolkata. 3. Bombay Life in Mumbai. 4. New India in Mumbai 5. Jupiter in Mumbai 6. Lakshmi Insurance in New-Delhi

2.3: KEY MILESTONES:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers along with provident societies were taken over by the central government and nationalized. LIC was formed by an Act of Parliament- LIC Act 1956-with a capital contribution of Rs. 5 Crores from the Government of India.

Insurance Industry in the year 2000-2001 had 13 new entrants, namely**: Table: 2.1

S.No.

Reg. No.

Date of Reg.

Name of the Company

1.

101

23.10.2000

HDFC Standard Life Insurance Company

2.

103

23.10.2000

Reliance General Insurance Company Ltd.

3.

104

15.11.2000

Max New York Life Insurance Co. Ltd.

4.

105

24.11.2000

ICICI Prudential Life Insurance Company

5.

107

10.01.2001

Kotak Mahindra Old Mutual Life Insurance

6.

109

31.01.2001

Birla Sun Life Insurance Company Ltd.

7.

110

12.02.2001

Tata AIG Life Insurance Company Ltd.

8.

111

30.03.2001

SBI Life Insurance Company Limited

9.

114

02.08.2001

ING Vysya Life Insurance Co. Pvt. Ltd.

10.

116

03.08.2001

Bajaj Allianz Life Insurance Co. Ltd.

11.

117

06.08.2001

MetLife India Insurance Co. Pvt. Ltd.

12.

122

14.05.2002

Aviva Life Insurance Co. India Pvt. Ltd.

13.

127

06.02.2004

Sahara India Insurance Company Ltd.

**Source: - Insurance Industry (ICFAI publication book)

2.4: Insurance Regulatory and Development Authority (IRDA): In 1999, the Insurance Regulatory and Development Authority (IRDA) were constituted as an autonomous body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory body in April, 2000. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums, while ensuring the financial security of the insurance market. The IRDA opened up the market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26%. The Authority has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders‟ interests.

Role of IRDA: 

Protecting the interests of policyholders.



Establishing guidelines for the operations of insurers, and brokers.



Specifying the code of conduct, qualifications, and training for insurance intermediaries and agents.



Promoting efficiency in the conduct of insurance business.



Regulating the investment of funds by insurance companies.



Specifying the percentage of business to be written by insurers in rural sectors.



Handling disputes between insurers and insurance intermediaries.

A: Changing perception of Indian customers: Indian Insurance consumers are like Indian Voters, they are soft but when time is right and ripe, they demand and seek necessary changes. De-tariff of many Insurance Products are the reflection of changing aspirations and growing demand of Indian consumers. For historical years, Indian consumers were at receiving end. Insurance Product was underwritten and was practically forced onto consumers on a “Take-it-As-it-basis”. All that got changed with passage of IRDA act in 1999. New insurance companies have come into existence leading to open competition and hence better products for customers. Indian customers have become very sensitive to Coverage/Premium as well as the Products (read Risk Solution), that is given to them. There are not ready to accept any product, no matter even if that is coming from the market leader, should that product is not serving the purpose. A case in point is ULIP Product/Group Life and Credit Life in Life Insurance segment and Travel/Family Floater Health and Liability Insurance in the Non-life segment are new age Avatar. The new products are constantly being demanded by Indian consumers, which is putting huge pressures on Insurance companies (Read Risk Under-writers) and Brokers to respond. Customers are looking at Insurance for covering Pure Risk now which I have covered in my next section. Another good reason why we are seeing quick changes in the buying behavior of Insurance from mere Investment to risk mitigation is the cost of Replacement of Goods (ROG) or Cost of Services (COS). Now Indian customers are aware of insurance industry and insurance products provided by companies. They have become more sensitive. They would not accept any type of insurance product unless it fulfills their requirements and needs. In historic day‟s customers looking at insurance products as a life cover which can provide security against any unacceptable events, but now customers look at insurance products as an investment as well as life cover. So today‟s customers wants good return from the insurance companies. The Indian customer‟s forms the pivot of each company‟s strategy.

B: Investment of Indian Household Savings** (As a % in different sector) Table: 2.2

BANK DEPOSITS

39%

CORP. BANKS

2%

SHARES AND DEBENTURES

1%

MUTUAL FUNDS

2%

NBFC‟S

3%

GOVT. BONDS

13%

INSURANCE

13%

PF/ RETIREMENT FUNDS

21%

CURRENCY

6%

**Source: - Insurance Industry (ICFAI publication book)

C: Changing Face of Indian Insurance Industry:

After the Insurance Regulatory and Development Authority Act have been passed there has been establishment of many private insurance companies in India. Previously there was a monopoly business for Life Insurance Corporation of India (L.I.C.) who was the only lifeinsurance company for the people till 2000. L.I.C. still holds 71.4% of the market share in 2006. But after the introduction of private life insurance companies there is a great competition in Indian market now. Everyone is trying to capture the fresh market here and penetrate it with aggressive marketing strategies. Today life-insurance is not only limited up to just life risk cover and maturity period bonuses but changed to greater return from the investments. With the introduction of the unit linked insurance policies these companies are investing the money in different investment instruments like shares, bonds, debentures, government and other securities. People are demanding for higher returns with the life risk cover and private companies are giving 30-40% average growth per annum. These lifeinsurance companies have every kind of policies suiting every need right from financial needs of, marriage, giving birth and rearing up a child, his education, meeting daily financial needs of life, pension solutions after retirement. These companies have every aspects and needs of our life covered along with the death-benefit. In India only 25% of the population has life insurance. So Indian life-insurance market is the target market of all the companies who either want to extend or diversify their business. To tap the Indian market there has been tie-ups between the major Indian companies with other International insurance companies to start up their business. The government of India has set up rules that no foreign insurance company can set up their business individually here and they have to tie up with an Indian company and this foreign insurance company can have an investment of only 24% of the total start-up investment. Indian insurance industry can be featured by: 

Low market penetration.



Ever growing middle class component in population.



Growth of customer‟s interest with an increasing demand for better insurance products.



Application of information technology for business.



Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Several of private insurers have introduced attractive products to meet the needs of their target customers and in line with their business objectives. The success of their effort is that they have captured over 28% of premium income in five years. The biggest beneficiary of the competition among life insurers has been the customer. A wide range of products, customer focused service and professional advice has become the mainstay of the industry, and the Indian customer‟s forms the pivot of each company‟s strategy. Penetration of life insurance is beginning to cut across socio-economic classes and attract people who have never purchased insurance before. Life insurance is also now being regarded as a versatile financial planning tool. Apart from the traditional term and saving insurance policies, industry has seen the entry and growth of unit linked products. This provides market linked returns and is among the most flexible policies available today for investment. Now products are priced, flexible, and realistic and sustain so people in better position to understand the risk and benefits of the product and they are accepting these innovative products. So it is clear that the face of life insurance in India is changing, but with the changes come a host of challenges and it is only the credible players with a long term vision and a robust business strategy that will survive. Whatever the developments, the future and the opportunities in this industry will surely be exciting. There are 12 private players in Indian life insurance market. 6 bank owned insurers - HDFC standard life, ICICI prudential, ING Vysya, MetLife, OM Kotak, SBI life 6 independent insurers - Aviva, ANP sanmar, Birla sun life, Bajaj Allianz, Max New York life, Tata-AIG, Bharti-AXA

Major international insurers are- Prudential and Standard life from UK, Sun life of Canada, AIG, MetLife and New York life of the US.

D: Increasing growth since liberalization*: Table: 2.3

YEAR

LIC (in bn Rs.)

PRIVATE PLAYER

FY03

110

10

FY04

120

20

FY05

130

40

FY06

140

60

FY07

240

160

*Source: - Insurance Industry (ICFAI publication book)

3. RESEARCH METHODOLOGY:

3.1 The Marketing Research Process: A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods. As MARKETING research is a systemic and formalized process, it follows a certain sequence of research action. The marketing process has the following steps: 

Formulating the problems



Exploration of the situation



Developing objectives of the research



Designing an effective research plan



Data collection techniques



Analysis f the collected data



Evaluating the data and preparing a research report

Primary Research:Primary data are the data that are collected to solve a problem or take advantage of any opportunities on which a decision is depending. These data are basically observed and recorded by the researcher for the first time. Research Design:For this study a survey research was adopted with the help of primary data. For getting primary data the research tool was a structured questionnaire. Sample Size: The sample for the purpose of study was the 50 customers. Sample Design: A sample design not only seeks to determine the size of sample and also the sampling unit. The sample for the purpose of study was the customer. Sample Techniques: The techniques adopted of selection of sampling of sample for study was simple random sampling method. Questionnaire Design: The author had a set of ideas and expected result based on those ideas from the questionnaire. For this reason questions were:      

Related to the field of study. Related to the research hypothesis. Questions must bear significance to concerned area of research. Questions must seek information unattainable from other sources. The must be short as possible but comprehensive enough to allow the author to derive his requirement of his research. Questions were well laid out.

3.2: Data Collection: After the research methodology, research problem in MARKETING has been identified and selected; the next step is to gather the requisite data. There are two types of data collection method – primary data and secondary data. 

Primary data collection method for observing working of company and approaching various persons of the MARKETING Department and asking them questions and notes written down while observing and assisting MARKETING persons in their work.



Secondary data collection method was used by referring to company records, files, and journals, broachers various websites, books, magazines, journals and daily newspapers for collecting information regarding project under study.

A: Bharti-AXA Business build-up in 3 years (INR Crs.)*:

350 300 250 200 150 100

Bharti-AXA SBI Life HDFC Standard ICICI Prudential

Max New York

50 0

Met Life Year 1

Year 2

Year 3

Bajaj Allianz

*Source: As per comparison done on the basis of figures published in IRDA journals

B: Bharti-AXA branch build-up in 3 years*: 250

Bharti-AXA

200

SBI Life

150

HDFC Standard

100

ICICI Prudential Max New York

50

Met Life

0 Year 1

Year 2

Year 3

Bajaj Allianz

*Source: As per comparison done on the basis of figures published in IRDA journals.

3.3: Limitation of the Study: However I tried my best to have desired information from he information from the respondents and to make the report fruitful but some limitations are bound to incur which may affect the results or findings. 1. No Secondary Data: As the subject of my project viz. consumer‟s aptitude towards unit-linked product was new so I was unable to have secondary data for the purpose of my study. 2. Small sample size: As sample size taken by me for purpose of survey was 50 respondents. So the result may have some deviations from the facts because of small sample size. 3. Limited area and time: The study although carried out with the fullest possible effort and devotion, the limitation of time, resources available may lead to an element chance of some error.

4: DATA ANALYSIS:

No. of respondents which are aware of life Insurance Do you know about Life Insurance Policy?

Valid

Frequency

Percent

Valid Percent

Yes No Total

48 2 50

96.0 4.0 100.0

96.0 4.0 100.0

Cumulative Percent 96 100

Do you know about life insurance policy?

yes no

Inference: Above bar chart shows that 96% of Peoples know about life insurance.

No. of respondents having the life insurance policy Do you have any Life Insurance Policy? Valid

Frequency

Percent

Valid Percent

Yes No Total

43 7 50

86.0 14.0 100.0

86.0 14.0 100.0

Cumulative Percent 86 100

Do you have any Life Insurance Policy?

Yes No

Inference: Above bar chart shows that 86% of respondents having Life Insurance.

Respondents’ preference in Investment Where would you prefer to invest? Valid

Frequency

Percent

Valid Percent

Govt. Securities Mutual Funds Equity Shares Insurances Total

10 18 14 8 50

20.0 36.0 28.0 16.0 100.0

20.0 36.0 28.0 16.0 100.0

Cumulative Percent 20 56 84 100

Where would you prefer to invest?

Govt. Securities Mutual Funds Equity Shares Insurances

Inference: Above pie chart show that 20% respondent of preferred in Govt. Security, 16% Insurance, 36% Mutual Funds and 28% in Equity Share.

Criteria of Invest of respondent On which criteria do you invest? Valid

Frequency

Percent

Valid Percent

Expert

10

20.0

20.0

Cumulative Percent 20

Advice Friendly

17

34.0

34.0

54

Advice Own Analysis Total

23 50

46.0 100.0

46.0 100.0

100

On which criteria do you invest?

50 40 30

On which criteria do you invest?

20 10 0 Expert Advice

Friendly Advice

Own Analysis

Inference: The majority of respondents invest their money by their own analysis i.e.46%, by friendly advice 34% respondents invest and 20% respondents invert their money by taken expert‟s advice.

Source of Income of respondents What is your source of income? Valid

Frequency

Percent

Valid Percent

Self

13

26.0

26.0

18 19 50

36.0 38.0 100.0

36.0 38.0 100.0

Cumulative Percent 26.0

Employed/Professional

Business Salaried Total

62.0 100.0

What is your source of income?

40 30 20 10 0

What is your source of income?

Inference: The majority of respondents are fall in the category of Salaried, approximately 38%, where as 36% are having Business and 26% are self employed.

Annual Income of respondents To which income group you belong? Valid

Frequency

Percent

Valid Percent

> 1,00,000 1,00,000 to 2, 00,000 200,000 to

10 20

20.0 40.0

20.0 40.0

Cumulative Percent 20 60

15

30.0

30.0

90

500,000 500,000 &

5

10.0

10.0

100

above Total

50

100.0

100.0

To which income group you belong? 40 35 30 25 To which income group you belong?

20 15 10 5 0 > 1,00,000

1,00,000 to 2, 00,000

200,000 to 500000

500,000 & above

Inference: It shows that Annual income of majority of respondents falls in the category of 1-2lac, approximately 40%. Whereas 20% in 20,000 Total

7 50

14.0 100.0

14.0 100.0

100

How much can you invest per annum? 40 35 30 25 How much can you invest per annum?

20 15 10 5 0 < 10,000

10,000 15000

15,000 20,000

> 20,000

Inference: It show that 26% of respondents invest around 1000-15000, where as 40 %< 10,000, 20% 1500020000, 14% invest 20000 or above.

Respondents preferred Duration of Policy For what duration would you like to hold the policy? Valid

Frequency

Percent

Valid Percent

< 5 Years 5-10 Years 10 -20 Years > 20 Years Total

9 18 16 7 50

18 36 32 14 100.0

18 36 32 14 100.0

Cumulative Percent 18 54 86 100

For what duration would you like to hold the policy? 40 35 30 25 For what duration would you like to hold the policy?

20 15 10 5 0 < 5 Years

5-10 Years

10 -20 Years

> 20 Years

Inference: It shows that the 36% of respondents prefer 5-10 years policy duration, where as 18% in 1, 00,000 [ ] 1, 00,000 to 2, 00,000 [ ] 200,000 to 500,000 [ ] 500,000 & above [ ] 3. Are you aware about the different options of investment? Yes [ ] No [ ] 4. On whose advice would you invest? Expert‟s Advice [ ] Friend‟s Advice [ ] Self Analysis [ ] 5. Where would you prefer to invest? Govt. Securities [ ] Mutual Funds [ ] Equity Shares [ ] Insurance [ ] 6. Are you aware that Life Insurance is a good option for investment, tax saving, savings as well as financial protection? Yes [ ] No [ ] 7. Do you have any Life Insurance Policy? Yes [ ] No [ ] 8. What type of plan do you have or would you prefer? Investment [ ] tax saving [ ] savings [ ] as well as financial protection [ ] 9. How much do you pay or can you invest per annum? < 10,000 [ ] 10,000 - 15,000 [ ] 15,000 - 20,000 [ ] > 20,000 [ ] 10. For what duration would you like to hold the policy? < 5 Years [ ] 5- 10 Years [ ] 10 - 20 Years [ ] > 20 Years [ ]

11. What is your main expectation from the insurance company? Security [ ] Good Return' [ ] Service [ ] Flexibility [ ] 12. What additional benefit do you want from the policy? Accidental [ ] Critical Illness [ ] Start of Life [ ] Family Income Benefit [ ] 13. What is your purpose behind taking an insurance plan? Tax Planning [ ] Risk Cover [ ] Retirement Planning [ ] Investment Planning [ ] All of these [ ] 14. Which company would you prefer to invest in? L.I.C. [ ] HDFC [ ] Bajaj Allianz [ ] ICICI Prudential [ ] Bharti-AXA [ ] others [ ] 15. Are you satisfied with the services that are offered by your insurance company? Yes [ ], No [ ] 16. What are the factors that have motivated you to prefer Bharti AXA over the other companies? Brand Name [ ] Goodwill of Bharti AXA [ ] Service [ ] Advertisement [ ] 17. If Given a Chance do you again prefer to buy the Bharti AXA Life Insurance policy in future? Yes [ ] No [ ] 18. What is the most dissatisfying factor do you feel about Bharti AXA? After Sale Service [ ] Product Diversification [ ] Fund Performance [ ] Advertisement [ ] 19. Rank the service of Bharti AXA Life Insurance? Excellent [ ] Good [ ] Average [ ] Below Average [ ]